For Product X, the Income Elasticity of Demand Is 1

question 8

Multiple Choice

For Product X, the income elasticity of demand is 1.16. Which of the following is therefore definitely true?

• A) Product X is a necessity.
• B) Product X is income elastic.
• C) Product X is a substitute for some other good.
• D) Product X is something that mostly poor people will buy.

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Definitions:

Agricultural Products

Goods derived from farming and agriculture, including food items, feed, fiber, and biofuel commodities.

Tariffs

Taxes imposed by a government on imported or occasionally exported goods, often used to protect domestic industries from foreign competition.

Agricultural Act of 2014

A comprehensive statute that governs United States federal farm programs including crop insurance, conservation programs, and nutritional assistance.

Freedom to Farm Act

U.S. legislation passed in 1996 that aimed to reduce government control over farming operations and allow farmers more freedom in their planting decisions.