Suppose the quantity of x is measured on the horizontal axis.If the income consumption curve is vertical,then the income elasticity of demand for x is
A) 0.
B) 1.
C) -1.
D) There is not enough information to determine the income elasticity of demand for x.

Question

Quizplus · Accepted Answer

If the income consumption curve is vertical, it means that changes in income do not affect the quantity demanded of x, which implies that the demand for x is income-inelastic. The income elasticity of demand is defined as the percentage change in the quantity demanded of x resulting from a 1% change in income. If the demand is income-inelastic, the income elasticity of demand is zero or close to zero, indicating that changes in income have little or no effect on the quantity demanded of x. Therefore, the correct choice is A) 0.

Suppose the Quantity of X Is Measured on the Horizontal