Answer the next question based on information in the following table.ProductPercentage Change in IncomePercentage Change in Quantity DemandedW?1?1X+6+10Y?1+1Z+4+8Which product has the largest income elasticity of demand?
A. product W
B. product X
C. product Y
D. product Z
Answer: D
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The value of the absolute price elasticity of demand for good X is 4. The absolute price elasticity for good Y is 1. Which good's quantity demanded is more responsive to a change in price?
A) Good X B) Good Y C) They are equally responsive. D) Not enough information is given.
Assuming the economy is represented by the graph shown, if the government were to enact a partially successful expansionary fiscal policy, it would be most likely to:
A. move from equilibrium A to B.
B. move from equilibrium B to A.
C. cause unemployment to temporarily increase.
D. cause deflation.
The benefits to specialization are even greater when two trading partners have:
A. absolute advantages in producing the same goods. B. large differences in opportunity costs. C. very similar opportunity costs. D. similar consumption preferences.
Which are contractionary fiscal policies?
a. Increased taxation and decreased government spending b. Increased taxation and increased government spending c. No change in taxation and increased government spending d. Decreased taxation and no change in government spending