Economists Estimated That the Price Elasticity of Beer Is -0

question 198

Multiple Choice

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means that

• A) an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.
• B) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.
• C) a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good.
• D) an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a necessity.

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Definitions:

Priming

A psychological phenomenon where exposure to one stimulus influences a response to a subsequent stimulus, without conscious guidance or intention.

Initiating

The act of beginning or starting something, such as a plan, process, or action.

Priming

A process in psychology by which exposure to a stimulus influences response to a later stimulus.

Impression

The overall perception or judgment formed about something or someone based on various information sources and interactions.