A Good Has an Income Elasticity of +0

question 84

Multiple Choice

A good has an income elasticity of +0.5.An increase in income from $15,000 to $25,000 will lead to a

• A)2.5 percent increase in the quantity demanded of the good.
• B)5 percent increase in the quantity demanded of the good.
• C)5 percent decrease in the quantity demanded of the good.
• D)25 percent decrease in the quantity demanded of the good.
• E)25 percent increase in the quantity demanded of the good.

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Definitions:

Refined Product

A substance that has been processed and purified from its raw state to enhance its utility or value.

Coal

A combustible black or brownish-black sedimentary rock made largely of carbon and hydrocarbons, used as a fossil fuel for producing energy.

Natural Gas

A fossil fuel used primarily for heating, cooking, and electricity generation, consisting mainly of methane.

Energy Resources

Various sources of usable energy, such as fossil fuels, nuclear, solar, wind, and hydroelectric power, that can be utilized to produce power.