In the Nation of Transporta,the Income Elasticity of Demand for Used

question 136

Multiple Choice

In the nation of Transporta,the income elasticity of demand for used cars is -2.66.If incomes in this nation increase by 10 percent,

• A)the quantity of used cars demanded increase by 26.6 percent.
• B)used cars will be normal goods.
• C)the quantity of used cars demanded decrease by 26.6 percent.
• D)the demand curve for used cars shifts rightward.
• E)the supply curve of used cars shifts rightward.

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Definitions:

Consumer Tastes

Preferences and inclinations of consumers towards certain products, brands, or services, often influenced by cultural, social, and personal factors.

Price-inelastic

Describes a market situation where the quantity demanded of a product does not change significantly when its price changes.

Price-sensitive

Refers to the degree to which the demand for a product or service is affected by changes in its price.

Unitary-elastic

A demand or supply situation where the percentage change in quantity demanded or supplied is exactly equal to the percentage change in price.