What does the sign (positive/negative) of the income elasticity tell us about a good?
What will be an ideal response?
The sign of the income elasticity of demand reveals whether a good is a normal good or an inferior good: The income elasticity of demand is positive for normal goods and negative for inferior goods.
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The slope of the Phillips curve in the United States was smallest during which period?
A) 1985-2012 B) 1970-1984 C) 1947-1969 D) 1776-1800
As the manager of a firm you calculate the marginal revenue is $152 and marginal cost is $200. You should
A) expand output. B) do nothing without information about your fixed costs. C) reduce output until marginal revenue equals marginal cost. D) expand output until marginal revenue equals zero. E) reduce output beyond the level where marginal revenue equals zero.
When the Federal Reserve conducts open market transactions, it
A) buys or sells corporate bonds in the bond market. B) issues government bonds to raise funds for the government. C) makes credit available to financial institutions in crises D) buys or sells previously issued government bonds.
Since there are diminishing returns to the removal of further trade barriers, economists do not favor further negotiations
Indicate whether the statement is true or false