Table 5-7 The Following Table Shows a Portion of the Demand Schedule

question 475

Multiple Choice

Table 5-7
The following table shows a portion of the demand schedule for a particular good at various levels of income.
-Refer to Table 5-7. Using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000?

• A)0.00
• B)0.50
• C)1.00
• D)1.50

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Definitions:

Inventory Turnover Rate

Inventory turnover rate measures how often a company sells and replaces its stock of goods during a certain period, indicating the efficiency of inventory management.

Collection Period

A financial metric that indicates the average number of days it takes a company to collect payments from its credit sales, essentially a detailed aspect of collection time with focus on receivables.

Accounts Receivable Balance

The accounts receivable balance is the total amount owed to a company by its customers for goods or services delivered on credit but not yet paid for.

Calendar Year

A one-year period that begins on January 1 and ends on December 31, used for general purposes including statutory reporting and personal timekeeping.