Suppose a 4 percent increase in income results in a 2 percent decrease in the quantity demanded of a good. Calculate the income elasticity of demand for the good and determine what type of good it is
What will be an ideal response?
Income elasticity of demand = -0.5. The good is inferior.
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Wealth is the same as:
A. assets. B. capital gains. C. net worth. D. savings.
An international division of labor will have no effect on total world output because resources are limited
Indicate whether the statement is true or false
A cut in the payroll tax will tend to cause, other things the same, ________
A) a change in aggregate demand, with no effect on supply B) a change in both aggregate demand and supply C) a change in aggregate supply, with no effect on demand D) no change in either aggregate demand or supply
If an externality is created by a single person or firm, and affects only a single person or firm, then
a. it is referred to as a single externality b. the inefficiency caused by that externality may be resolved by those two parties c. the externality takes the form of a side payment d. Pareto efficiency is guaranteed e. fairness dictates that the externality be removed