If Incomes Fall by 5 Percent and the Quantity Demanded

question 71

Multiple Choice

If incomes fall by 5 percent and the quantity demanded for new cars falls by 10 percent,

• A)New cars are a normal good,and the income elasticity is +.5.
• B)New cars are an inferior good,and the income elasticity is +2.0.
• C)New cars are a normal good,and the income elasticity is +2.0.

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