If a Consumer Increases Her Quantity of Ice Cream Consumed

question 45

Multiple Choice

If a consumer increases her quantity of ice cream consumed by 100% when her income rises by 25%, then her income elasticity of demand for ice cream is

• A)8.0
• B)4.0
• C)0.25
• D)0.08

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Definitions:

Period Cost

Expenses that are not directly tied to the production of goods and are charged to the time period in which they are incurred.

Manufacturing Company

A type of company that uses raw materials, parts, and components to assemble finished goods.

Direct Labor

The labor costs directly tied to the production of goods or services, including wages of workers directly involved in manufacturing.

Factory Employees

Workers employed in a manufacturing setting, responsible for the production of goods.