When Price Is $5 Per Unit, Quantity Demanded Is 12

question 293

Multiple Choice

When price is $5 per unit, quantity demanded is 12 units. When price is $6 per unit, quantity demanded is 8 units. The value of the absolute price elasticity of demand is approximately

• A) 2.20.
• B) 4.00.
• C) 1.82.
• D) 0.36.

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Definitions:

Illusory Correlation

The belief in a correlation between two factors even though such a connection does not truly exist.

Magical Thinking

The belief that one's thoughts, words, or actions can directly influence the physical world or the course of events in an irrational way.

First Instinct Fallacy

The mistaken belief that an individual's initial answer to a question is more likely to be correct than any answer they might change it to upon further consideration.

False Consensus Effect

The tendency to overestimate the extent to which others share one's beliefs, attitudes, or behaviors.