Suppose That the Income Elasticity of Demand for Peanut Butter

question 157

Multiple Choice

Suppose that the income elasticity of demand for peanut butter is 0.75. Which of the following is true?

• A) Peanut butter is a normal good, because income elasticity is positive.
• B) Peanut butter is an inferior good, because income elasticity is positive.
• C) Peanut butter is a normal good, because income elasticity is less than 1.
• D) Peanut butter is an inferior good, because income elasticity is less than 1.

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Definitions:

Subordinates

Individuals who work under the direction and control of a superior in the hierarchy of an organization.

Social Power

Power used to create motivation or to accomplish group goals.

David McClelland

A psychologist known for his work on motivation theory, particularly the theory of Needs (Achievement, Power, and Affiliation).

Group Goals

Objectives set by a collective that guide its actions and efforts towards a common end.