Say that a consumer's income elasticity of demand over the relevant range is equal to 2 . When she has a monthly income of $2,000, she spends $600 on food. If her monthly income rose to $4,000, how much would she spend on food?
a. $900
b. $1200.
c. $1800.
d. $2400.
d
You might also like to view...
How does competition affect entrepreneurs?
A. Raises prices for consumers B. Lowers the cost to produce goods C. Lowers prices for consumers D. Nothing, entrepreneurs do not face competition the same way as businesses
Expansionary monetary policy decreases the federal funds rate
Indicate whether the statement is true or false
By decreasing the required reserve ratio, the Federal Reserve will
A. increase the money supply unless accompanied by a decrease in the discount rate. B. increase the money supply unless banks hold on to excess reserves instead of lending them. C. decrease the money supply by the amount of the initial change caused by the decreased required reserve ratio. D. decrease the money supply by a multiple of the initial change caused by the decreased required reserve ratio.
The economic policy of the U.S. government could have been described as laissez-faire until about
A. 1860. B. 1900. C. 1933. D. 1945.