If the Consumption of Alcoholic Beverages Is Higher for Lower-Income

question 113

True/False

If the consumption of alcoholic beverages is higher for lower-income people than for higher-income people, then the income elasticity of demand for alcoholic beverages is positive.

---

Definitions:

Marginal External Cost

The cost of producing one additional unit of a good or service that is borne by people other than the producer, often not reflected in the product's market price.

Socially Optimal

A state or outcome in which resource allocation maximizes social welfare, considering all costs and benefits to society.

Market Price

The current price at which an asset or service can be bought or sold, determined by supply and demand.

Emissions Standard

Legal limit on the amount of pollutants that a firm can emit.