Suppose the Price Elasticity of Demand for Good X Is

question 20

Multiple Choice

Suppose the price elasticity of demand for good X is 1.5.If household income increases by 25%,ceteris paribus,what is the change in quantity demanded for good X?

• A)a 37.5% increase in quantity demanded
• B)a 3.75% increase in quantity demanded
• C)a 0.375% increase in quantity demanded
• D)no change in quantity demanded
• E)There is not enough information to answer this question.

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Definitions:

Relative Frequency Histogram

A type of histogram in which each bar represents the proportion or percentage of data points that fall into each of a series of specified classes.

Relative Class Frequency

The fraction or percentage of data points that belong to a specific category or class in relation to the total dataset.

Relative Frequencies

The proportion of times a particular value occurs in a dataset relative to the total number of occurrences.

Bar Charts

Graphical representations of data using bars of different heights or lengths to illustrate comparisons among categories.