In order to determine a causation between a change in the price of iPhones and the amount of iPhones purchased by customers, an economist must show that
A)there is no correlation between the price of iPhones and the quantity of iPhones purchased.
B)the change in the quantity of iPhones purchased occurs after the change in the price of iPhones.
C)the change in the price of iPhones occurs along with the change in the quantity of iPhones purchased.
D)the changes in the price and quantity of iPhones purchased always move in the same direction.
E)the change in the price of iPhones brings about the change in the quantity of iPhones purchased.

Question

Quizplus · Accepted Answer

To determine causation, the economist must show that the change in the price of iPhones brings about the change in the quantity of iPhones purchased. This is known as the law of demand, which states that as the price of a good or service increases, the quantity demanded decreases, and vice versa. Without this causal relationship, any observed correlation between the price and quantity of iPhones purchased could be due to other factors, such as changes in consumer preferences or income. Therefore, the best answer is E.

In Order to Determine a Causation Between a Change in the Price