If income decreases by 20% and, in response, the quantity of housing demanded decreases by 14%, then the income elasticity of demand for housing is
A. -1.
B. 1.43.
C. -0.7.
D. 0.7.
Answer: D
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Suppose you hold $50 to buy groceries weekly and then the price of groceries increases by 5 percent. To be able to buy the same amount of groceries, what must happen to your nominal money holdings?
A) They must increase by $5. B) They can decrease by $5. C) They must increase by $2.50. D) They must increase, but the amount of the increase depends on income.
Holding your income and the price of lobster constant, you can derive your demand curve for steak from an indifference curve/budget line diagram by determining how your consumption of steak changes when the price of a steak changes
Indicate whether the statement is true or false
Suppose a firm's costs are F + v ? q2 where F and v are positive real numbers and the firm sells its product at the market determined price p. Profits are calculated using
A) p ? q - F - v ? q2. B) [p -(F/q + v ? q)] ? q. C) [(p ? q)/q -(F + v ? q)/q] ? q. D) Both A and B.
Which type of unemployment is most likely to help an economy become more efficient?
a. Cyclical unemployment b. Voluntary unemployment c. Seasonal unemployment d. Frictional unemployment e. Underemployment