An Income Elasticity of Demand for Milk of 0

question 37

Multiple Choice

An income elasticity of demand for milk of 0.1 could mean that

• A) as income rises by 10 percent, quantity demanded rises by 1 percent.
• B) as income rises by 100 percent, quantity demanded rises by 1 percent.
• C) as income rises by 20 percent, quantity demanded rises by 10 percent.
• D) as income rises by 50 percent, quantity demanded rises by 25 percent.

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Definitions:

Power Differential Heuristic

A mental shortcut used in decision-making that accounts for the imbalance of power in relationships or situations.

Blue Uniforms

Clothing of a blue color worn by members of certain professions, commonly associated with law enforcement or military personnel.

Anchoring with Adjustment Heuristic

A cognitive bias in decision-making where an initial value (the "anchor") heavily influences subsequent judgments and adjustments.

Temporizing Heuristic

A cognitive strategy involving delaying decision making until more evidence or information is available.