A typical consumer spends 30% of income on housing and housing is a necessity for consumers (the income elasticity for housing is 0 < ?H < 1 ). What are the maximum and minimum values for the income elasticity of all other goods, ?O?
What will be an ideal response?
The weighted income elasticities must sum to 1:
0.3?H + .7?O = 1
The maximum value ?H = 1 yields ?O = 1. The minimum value ?H = 0 yields ?O = 1.42.
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In 2008, as the economy moved into a recession,
A) cyclical unemployment increased. B) structural unemployment decreased. C) natural unemployment decreased. D) frictional unemployment was not affected. E) the number of marginally attached workers decreased.
Opportunity cost is defined as the
A) total value of all the alternatives given up B) highest-valued alternative given up C) cost of not doing all of the things you would like to do. D) lowest-valued alternative given up
In the United States in 2014, the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about
A) 29%. B) 42%. C) 61%. D) 98%.
Which of the following statements is true?
a. When a change in income causes consumption to change, the consumption-income line shifts; however, when anything besides income changes, we move along the line. b. When a change in income causes consumption to change, we move along the consumption-income line; however, when anything besides income changes, the line shifts. c. When income or anything else affecting consumption changes, we move along the consumption-income line. d. When income or anything else affecting consumption changes, the consumption-income line shifts. e. There is no way to determine, without more information, whether a change in income or anything else will shift the consumption line or cause movement along the consumption-income line.