If a Product's Income Elasticity Is - 3

question 62

Multiple Choice

If a product's income elasticity is - 3.4, then we can conclude that

• A) an increase in income will lead to an increase in demand for the product.
• B) the product is a normal good.
• C) the product is certainly a necessity.
• D) the product has a rising income- consumption curve.
• E) a decrease in income will lead to an increase in demand for the product.

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Definitions:

Mortgage Bonds

Debt securities secured by a mortgage or collection of mortgages, giving holders a claim on the underlying property.

Directors' Meeting

A formal gathering of the board of directors of an organization to discuss and make decisions on company policy and management issues.

Preferred Shares

A type of stock that provides dividends and certain privileges in the event of liquidation before common stockholders.

Common Share

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company’s profits via dividends.