Suppose That the Income Elasticity of Demand for New Clothes

question 55

Multiple Choice

Suppose that the income elasticity of demand for new clothes is positive. Other things being equal, which of the following statements is correct?

• A)New clothes are a normal good.
• B)The quantity demanded of new clothes decreases as a consumerʹs income declines.
• C)There exists a positive relationship between income and the demand for new clothes.
• D)all of the above

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Definitions:

Short-term Memory

Short-term memory refers to the capacity for holding a small amount of information in an active, readily available state for a short period of time.

Working Memory

The memory subsystem that we use when we try to understand information, remember it, or use it to solve a problem or communicate with someone.

Tertiary Memory

A term sometimes used to describe long-term storage of information that is not in active use but can be accessed when required.

Levels-of-processing Model

A theory suggesting the depth of mental process related to memory retention, from shallow perceptual levels to deeper semantic ones.