If your income goes down by10% and, in response, the quantity demanded of good x falls by 20%, the income elasticity of demand would be:
a. 2
b. 4
c. .5
d. .20
a
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Which industry would be considered to be monopolistically competitive?
A. Groceries in a small remote town. B. Locally owned restaurants in large cities. C. Fast food restaurants along rural interstate highways. D. Agriculture products sold at farmers' market.
Monopolistically competitive firms are like perfectly competitive firms in that they both sell homogeneous products.
Answer the following statement true (T) or false (F)
Which of the following statements correctly identifies a reason why inflation can be used as a countercyclical policy tool?
A) Inflation sometimes increases the demand for workers that increases output and helps combat slowdowns. B) Inflation reduces money costs and hence stimulates an economy during slowdowns. C) Inflation increases consumer demand which is necessary for combating slowdowns. D) Inflation increases consumer confidence, which is an absolute necessity to counter act business cycles.
Phil Harrison is a welder who works on skyscrapers and extension bridges. Phil's brother William is also a welder but he works in a manufacturing plant where he does all of his welding on ground level
Which of the following would not explain why Phil earns a higher wage than his brother? A) cognitive dissonance B) Phil's marginal revenue product is greater than William's marginal revenue product. C) Phil has greater experience as a welder than his brother has. D) Phil's job is more hazardous than William's job.