The Price Elasticity of Demand Tends to Be Higher for Goods

question 162

Multiple Choice

The price elasticity of demand tends to be higher for goods

• A)for which the consumer spends a high percentage of his or her income.
• B)for which the consumer spends a low percentage of his or her income.
• C)that are in abundant supply.
• D)that are in scarce supply.

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Definitions:

Budget Line Graph

A type of graph used when a consumer is comparing two categories of expenses; it indicates the amount that can be allotted to each expense so that both categories can be afforded within a certain income.

Entertainment Budget

A financial plan allocating specific funds for recreational and leisure activities within a certain period.

Debt-Reduction Plan

A Debt-Reduction Plan is a strategy that individuals or organizations follow to pay off money owed, typically involving a structured payment schedule to reduce or eliminate debt over time.

Credit Card Spending

The total amount of money being charged to a credit card account for purchases and cash advances.