Income elasticity measures the
A. Percentage change in quantity demanded given a percentage change in wealth.
B. Responsiveness of quantity demanded to a percentage change in income.
C. Way in which consumers switch from one product to another when price rises.
D. Responsiveness of quantity demanded for one good to a percentage change in price of another good.
Answer: B
You might also like to view...
Basically the United States' high rate of population growth since the time of George Washington's presidency
A. has been a drag on the United States' rate of economic growth. B. pushed up the United States' rate of unemployment. C. created a growing problem of not enough food to feed everyone. D. provided a market for the United States' farmers and manufacturers.
Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units
A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high. B) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. C) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low. D) producers should lower the price to $1 in order to sell the quantity demanded of 10,000.
Assume the aggregate demand curve intersects the aggregate supply curve in its intermediate range. A decrease in the aggregate supply curve will
A. increase the price level and decrease real GDP. B. decrease the price level and increase real GDP. C. increase both the price level and real GDP. D. decrease both the price level and real GDP.
When a country continually adds more capital to its existing stock productivity will:
A. decrease at a decreasing rate. B. decrease at an increasing rate. C. increase at an increasing rate. D. increase at a decreasing rate.