If the Income Elasticity of Demand for a Good Is

question 36

Multiple Choice

If the income elasticity of demand for a good is 0.75,a 25% increase in income results in

• A)an 18.75% increase in quantity demanded.
• B)a 3% increase in quantity demanded.
• C)a 0.1875% increase in quantity demanded.
• D)a 3% decrease in quantity demanded.
• E)There is not enough information to answer.

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Definitions:

Physics Exam

A standardized test or assessment aimed at measuring one's understanding and application of physics concepts.

Lecture

An educational talk to an audience, particularly to students in a university or college, focusing on a particular subject or topic.

Spending

The act of using money to purchase goods or services, often considered in the context of personal, government, or business expenditures.

Income

The financial gain acquired by an individual or a business in exchange for providing labor, product, or service or through investing capital.