Last year, Joan bought 50 pounds of hamburger when her household income was $40,000. This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger
Holding everything else constant, Joan's income elasticity of demand for hamburger is
A) negative, so Joan considers hamburger to be an inferior good.
B) negative, so Joan considers hamburger to be a normal good.
C) positive, so Joan considers hamburger to be an inferior good.
D) positive, so Joan considers hamburger to be a normal good and a necessity.
A
You might also like to view...
Based on the model of the money market, if prices in the economy decrease, the equilibrium interest rate should
A) stay the same. B) increase. C) decrease. D) increase to the same extent that the supply of money increases.
Make use of the misperceptions theory to explain why the short-run aggregate supply curve is upward sloping
What will be an ideal response?
The amount of consumption in an economy depends:
a. Inversely on the level of saving b. Directly on the level of disposable income c. Inversely on the level of disposable income d. Directly on the rate of interest
In the above figure, a movement from point B to point C could be explained by
A. the real-balance effect. B. increased government spending. C. an increase in the price level. D. a decrease in the quantity of money in circulation.