Scarlett developed an economic model to describe the behavior of consumers according to the good price, and their income and tastes. All else equal, her model predicts that an increase in the price of the good may increase or decrease the number of units purchased. What can be said about Scarlett's model?

A) The model's prediction is ambiguous.
B) The model's prediction is not ambiguous.
C) The model has no assumptions.
D) B and C


A

Economics

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Suppose a consumer's income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer's income elasticity of demand for CDs?

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