The Income Elasticity of Demand for Peaches Has Been Estimated

question 41

Multiple Choice

The income elasticity of demand for peaches has been estimated to be 1.43.If income grows by 15 percent in a period, how will that affect demand for peaches in that period, all other things unchanged?

• A) demand will increase by less than 15 percent
• B) demand will increase by 21.5 percent
• C) demand will decrease by 21.5 percent
• D) demand will decrease by 15 percent

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Definitions:

Social Contagion

The phenomenon where attitudes, behaviors, or emotions spread through a group or community, often unconsciously.

Social Loafing

Each person’s tendency to exert less effort in a group because of reduced accountability for individual effort.

Group Polarization

The tendency for a group's prevailing attitudes or beliefs to become more extreme after discussing them as a group.

Social Facilitation

Improvement in an individual’s performance because of the presence of others.