Income Elasticity of Demand Measures

question 114

Multiple Choice

Income elasticity of demand measures:

• A) how much quantity demanded changes in response to a price change.
• B) how much a consumer can buy at given income levels.
• C) how much consumer purchasing power is affected when prices change.
• D) how demand for a good changes in response to changes in income.

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Definitions:

Marginal Utility

The additional satisfaction gained from consuming an additional unit of a good or service.

Hypothetical Consumer

A theoretical or model consumer whose purchasing decisions and behavior are used to analyze the demand side of the market.

Product X

This term is unspecified and could refer to any product or item being discussed or analyzed in a specific context.

Total Utility

The complete pleasure or advantage a customer gets from using a certain amount of products or services.