Use the figure to calculate the income elasticity of demand when income increases from $25,000 to $30,000:
A. -0.1818
B. -1.0
C. 0.1818
D. 1.2
E. -1.5
Answer: B
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If you pay $2,000 in taxes on an income of $20,000, and a tax of $3,000 on an income of $30,000, then over this range of income the tax is
A) regressive. B) proportional. C) progressive. D) There is insufficient information to answer the question.
The biggest problem caused by a deflation is that:
A. prices fall. B. wages fall. C. people cannot repay their debts. D. interest rates rise.
When an economist states that "price changes cause quantity changes ceteris paribus", she is stating that price changes cause quantity changes
A. only in theory. B. always. C. all else equal. D. only in efficient markets.
If Mexico has a comparative advantage in the production of oil compared to France, then
A. France has an absolute advantage in the production of oil. B. Mexico can produce oil at a lower opportunity cost than France. C. Mexico also has an absolute advantage in the production of oil. D. France cannot produce oil.