If Good Z Has an Income Elasticity of 1

question 172

Multiple Choice

If good Z has an income elasticity of 1.0, then demand for good Z is income __________ and the good is __________.

• A)inelastic, normal
• B)inelastic, inferior
• C)elastic, normal
• D)elastic, inferior
• E)unit elastic, normal

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Definitions:

Mixed Cost

A cost that contains both variable and fixed cost elements, making its total expense vary with activity level but not in direct proportion.

Maintenance Costs

Expenses associated with the upkeep of buildings, equipment, machinery, or vehicles to ensure proper functionality and efficiency.

Machine Hour

A measure of the amount of time a machine is operated, used in calculating manufacturing costs and efficiency.

Total Salaries

The aggregate amount of compensation paid to employees before deductions, such as taxes and retirement fund contributions, are made.