A Firm Knows That Seneca's Income Elasticity of Demand for Hair

question 83

Multiple Choice

A firm knows that Seneca's income elasticity of demand for hair ties is 5; for Janelle,it is 0.2.A firm can reason that a hair tie is a(n) ________ good for Seneca while it is a(n) ________ good for Janelle.

• A) normal; inferior
• B) complement; substitute
• C) necessity; luxury
• D) inferior; normal
• E) luxury; necessity

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Definitions:

Overestimate Accuracy

The tendency to overvalue one's ability to accurately recall, predict, or perform tasks.

Memory of General Information

The ability to recall facts, concepts, and knowledge about the world that is not tied to specific experiences.

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Deep Processing

Refers to a method of learning and memory retrieval that involves a meaningful analysis of the information, leading to better recall.