The Income Elasticity of Demand

question 6

Multiple Choice

The income elasticity of demand

• A)is usually zero because "you can only have so much."
• B)could be positive or negative or zero, depending on the nature of the good.
• C)can never be zero.
• D)must be positive because consumers tend to buy more at higher incomes.
• E)must be negative because of the law of increasing cost.

Calculate the net advantage to leasing (NAL) for various assets considering tax rates, depreciation, interest rates, and lease payments.

Recognize the role of tax shields in lease versus buy decisions, specifically in relation to depreciation and Capital Cost Allowance (CCA).

Evaluate the impact of asset obsolescence, temporary need, and restrictive covenants on the decision to lease or buy.

Understand how leasing transfers uncertainty about asset value and future market conditions from the lessee to the lessor.