Assume That a 3 Percent Increase in Income Across the Economy

question 29

Multiple Choice

Assume that a 3 percent increase in income across the economy produces a 1 percent decline in the quantity demanded of good X. The coefficient of income elasticity of demand for good X is

• A) negative, and therefore X is an inferior good.
• B) negative, and therefore X is a normal good.
• C) positive, and therefore X is an inferior good.
• D) positive and therefore X is a normal good.

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Definitions:

Selection Bias

A type of error that occurs when the sample is not representative of the population being studied, potentially leading to skewed results.

Observational Studies

Research methods where subjects are observed in their natural environment without any manipulation by the researcher.

Behavior of Chimpanzees

The range of activities and behaviors exhibited by chimpanzees, reflecting their complex social structures, communication methods, and intelligence.

Case Studies

Case studies are detailed examinations of a single subject or situation to explore its dynamics and draw conclusions applicable to similar contexts.