Microeconomics A Contemporary Introduction Study Set 1
Quiz 5: Elasticity of Demand and Supply
If income rises and the demand for a product remains unchanged, the income elasticity of demand for that product is unit elastic.
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A normal good is defined as a product for which quantity demanded increases as price decreases.
Inferior goods have an income elasticity of demand that is A)positive B)negative C)0 D)greater than 1 in absolute value E)equal to 1 in absolute value
For which of the following goods is the value of income elasticity most likely to be negative? A)macaroni and cheese B)champagne C)airline tickets D)clothes E)toothpaste
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