The Income Elasticity of Demand for Education Is 3

question 98

Multiple Choice

The income elasticity of demand for education is 3.5. Thus, a 6% decrease in income will

• A) decrease the quantity of education demanded by 3.5%.
• B) decrease the quantity of education demanded by 21%.
• C) increase the quantity of education demanded by 6%.
• D) increase the quantity of education demanded by 21%.

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Definitions:

Adjusting Entry

An accounting entry made at the end of a period to assign income and expenses to the period in which they actually occurred.

Equipment

Tangible assets used in operations, such as machinery or office hardware, that have a useful life longer than one reporting period.

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Adjusting Entries

Journal entries made in accounting to update the records for expenses and revenues that have accrued but are not yet recorded.