Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
a. negative, and the good is an inferior good.
b. negative, and the good is a normal good.
c. positive, and the good is a normal good.
d. positive, and the good is an inferior good.
c
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Use the following table, which shows the supply and demand schedules for the euro, to answer the next question.Quantity of Euros SuppliedPriceQuantity of Euros Demanded400$1.101003601.002003000.903002860.804002670.70500If the U.S. government decides to fix or peg the price of the euro at $1.00, it would have to ________.
A. buy 160 euros B. sell 160 euros C. buy 360 euros D. sell 360 euros
Historians are in general agreement that
(a) railroads opened the country and were built at great risk ahead of demand, gambling on the future. (b) railroads sharply cut down transportation costs, linking the country together in all directions and spurring the nation's growth far in advance of anything that might otherwise have been achieved. (c) railroads were the single innovation of the 19th century that created a great leap forward in terms of American economic growth. (d) none of the above are true.
The position of the supply curve in the market for garbage removal
a. is irrelevant since the cost is fixed. b. depends on the marginal cost of garbage removal. c. depends on the demand for garbage removal services. d. is unaffected by taxes levied per household amount of garbage.
Assume the analysis of Friedman and Phelps is correct, so that the following equation is valid: Unemployment rate = Natural rate of unemployment - a × (?ctual inflation - x). In this equation,
a. a is a parameter that measures how much actual inflation responds to expected inflation. b. a = 0 at the point of intersection of the short-run and long-run Phillips curves. c. x is the expected rate of inflation. d. All of the above are correct.