Suppose that the income elasticity of demand for new clothes is positive. Other things being equal, which of the following statements is correct?
A. New clothes are a normal good.
B. The quantity demanded of new clothes decreases as a consumer's income declines.
C. There exists a positive relationship between income and the demand for new clothes.
D. All of these
Answer: D
You might also like to view...
The above table gives a country's government outlays and tax revenue for 2008 through 2012. During which years did the country have a balanced budget, budget surplus, and budget deficit?
What will be an ideal response?
By the method of Lagrange multipliers, the optimal value of the Lagrange multiplier equals the:
A) marginal utility of income. B) marginal utility of each good. C) marginal utility per dollar spent on the last unit of each good. D) A and B above E) A and C above
Opportunity cost measures:
a. value in terms of the cost of production. b. total accounting cost. c. value-based prices. d. foregone opportunities. e. the difference between production cost and resource cost
Tax influence of the elasticity of supply
What will be an ideal response?