If Mr Brown's Income Increases by 12 Percent and as a a Result

question 137

Multiple Choice

If Mr. Brown's income increases by 12 percent and as a result his quantity demanded of music downloads increases by 4 percent, Mr. Brown's income elasticity of demand for music downloads is

• A)3.0.
• B)0.33.
• C)-0.33.
• D)-3.0.
• E)48.0.

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Definitions:

Cost of Goods Sold

An accounting term representing the direct costs attributable to the production of the goods sold in a company, including materials and labor.

Accounts Receivable Turnover

A financial ratio that measures how effectively a company collects debts from its customers, calculated as sales divided by the average accounts receivable.

Total Assets

The summation of all resources owned by a company, valued in monetary terms, including property, cash, investments, and inventory.

Solvency

A company's ability to meet its long-term debts and financial obligations.