The quantity demanded of good X falls by 20% and, in response, your income goes down by 10% and, the income elasticity of demand would be:
a. 2
b. 4
c. .5
d. .20
a
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
In some developing countries and in some former Communist countries, people exchange their domestic currencies for foreign currencies such as the dollar in black markets. Why would this practice go on?
What will be an ideal response?
Which of the following taxes has the greatest effect on the natural rate of unemployment?
a) income taxes b) retail sales taxes c) Social Security taxes d) real estate taxes e) inheritance taxes
A consumer has been buying 2 magazines and 1 book each month. The price of magazines then decreases, which directly causes the marginal utility per dollar spent on
A. magazines to increase, thereby inducing the consumer to purchase more magazines and fewer books. B. books to increase, thereby inducing the consumer to purchase fewer magazines and more books. C. magazines to increase, thereby inducing the consumer to purchase fewer magazines and more books. D. books to decrease, thereby inducing the consumer to purchase fewer magazines and more books.