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:

Gender Differences

Pertains to the distinctions in characteristics, behaviors, roles, and psychological attributes traditionally associated with being male or female in a society.

Ossified

Becoming rigid or inflexible, often used metaphorically to describe ideas or structures that are no longer open to change.

Sleeper Effects

The detrimental effects of early-life adversity that occur only later in development.

Early-Life Adversity

Profound and pervasive deprivation experienced during infancy, often resulting in severe developmental delays.