If Incomes Fall by 5 Percent and the Quantity Demanded

question 40

Multiple Choice

If incomes fall by 5 percent and the quantity demanded for new cars falls by 10 percent,

• A)New cars are a normal good,and the income elasticity is +.5.
• B)New cars are an inferior good,and the income elasticity is +2.0.
• C)New cars are a normal good,and the income elasticity is +2.0.
• D)New cars are an inferior good,and the income elasticity is +0.5.

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Definitions:

Analytical Psychology

A branch of psychology founded by Carl Jung that emphasizes understanding the psyche through exploring the world of dreams, art, mythology, world religion, and philosophy.

Psychodynamic Theory

A psychological perspective that emphasizes unconscious processes and childhood experiences in shaping personality and behavior.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology and contributed significantly to the understanding of the psyche.

Inferiority Complex

A psychological condition marked by feelings of inadequacy and insecurity, often stemming from real or imagined comparisons to others.