Vevaan Just Got a Raise at Work, and He Decides

question 39

Multiple Choice

Vevaan just got a raise at work, and he decides to splurge on a fancy dinner to celebrate. The change in Vevaan's demand for fancy dinners could be measured by the:

• A) price elasticity of supply.
• B) price elasticity of demand.
• C) cross-price elasticity of demand.
• D) income elasticity of demand.

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Definitions:

Price-Elastic

Describes a situation where the demand or supply for a good or service significantly changes in response to price changes.

Price Elasticity

A measure of the responsiveness of quantity demanded or supplied to a change in price.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing and able to sell.

Budget Proportion

Budget proportion refers to the allocation or division of an individual's or entity's budget among various expenses or categories.