If a consumer doubles her quantity of ice cream consumed when her income rises by 25%, then her income elasticity of demand for ice cream is
A) 8.0.
B) 4.0.
C) .25.
D) .08.
B
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Suppose that in Canada the government places a $1,500 tax on the buyers of new snowmobiles. After the purchase of a new snowmobile, a buyer must pay the government $1,500. How would the imposition of the tax on buyers be illustrated in a graph?
A) The tax will shift both the demand and supply curves to the right by $1,500. B) The tax will shift the demand curve to the left by $1,500. C) The tax will shift the supply curve to the left by $1,500. D) The tax will shift the demand curve to the right by $1,500.
The National Recovery Act:
a. largely redistributed rather than expanded incomes. b. cut unemployment in half. c. was declared unconstitutional by the Supreme Court. d. Both a and b are correct. e. Both a and c are correct.
When the housing bubble collapsed, the entire borrowing and lending engine of the economy ground to a halt because:
A. no one could tell which banks were safe, and which were not. B. banks wanted to lend to no one, in case they turned out to be a bad risk. C. the herd instinct became to not borrow or lend. D. All of these statements are true.
]If consumers become more optimistic, which of the following is the most likely in the short run?
a. A decrease in output, a decrease in money demand, and a decrease in the interest rate. b. An increase in output, an increase in money demand, and an increase in the interest rate. c. An increase in output, an increase in money demand, and a decrease in the interest rate. d. A decrease in output, an increase in money demand, and a decrease in the interest rate. e. An increase in output, a decrease in money demand, and a decrease in the interest rate.