If the Income Elasticity of Demand for Noodles Is -2

question 1

Multiple Choice

If the income elasticity of demand for noodles is -2 and the percentage change in the quantity consumed is 5%, what is the percentage change in income?

• A) 2.5%
• B) 10%
• C) -2.5%
• D) -10%
• E) -0.4%

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Definitions:

Structural Unemployment

Occurs when there is a mismatch between the skills that workers in the economy can offer and the skills demanded by employers.

Changing Technology

Refers to the rapid evolution and adoption of new tools, processes, and methodologies in the technology sector, affecting businesses and societies.

Stagflation

A situation in an economy characterized by slow economic growth combined with high unemployment and high inflation.

Unemployment

The situation where individuals who are capable of working and are actively seeking work are unable to find employment.