Last year, Joan bought 50 pounds of hamburger when her household's income was $40,000 . This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger. All else constant, Joan's income elasticity of demand for hamburger is
a. positive, so Joan considers hamburger to be an inferior good.
b. positive, so Joan considers hamburger to be a normal good and a necessity.
c. negative, so Joan considers hamburger to be an inferior good.
d. negative, so Joan considers hamburger to be a normal good but not a necessity.
c
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A 10 percent increase in price leads to a 20 percent decrease in the quantity demanded. The price elasticity of demand is equal to
A) 0.5. B) 1.0. C) 2.0. D) 20.0. E) 10.0.
If the price of milk increased by 5 percent because of an increase in the demand for milk, and the quantity of milk supplied increased by 7 percent
A) the supply curve of milk has shifted rightward. B) the price elasticity of supply of milk is greater than one. C) milk is more of a luxury than a necessity. D) milk is more of a necessity than a luxury.
Many extended periods of high actual unemployment above the natural rate have been the result of
A) deliberate government anti-inflationary policy. B) high job turnover. C) mismatches in the labor market. D) unemployment compensation.
The above figure shows the market for steel ingots. If the market is competitive, then
A) the socially optimal quantity of steel is zero. B) the socially optimal quantity of steel of 50 units is produced. C) the socially optimal quantity of steel of 100 units is produced. D) more than the socially optimal quantity of 50 units of steel is produced.