Suppose the Income Elasticity of Demand for Toys Is +2

question 43

Multiple Choice

Suppose the income elasticity of demand for toys is +2.0. This means that

• A)a 10 percent increase in income will increase the purchase of toys by 20 percent.
• B)a 10 percent increase in income will increase the purchase of toys by 2 percent.
• C)a 10 percent increase in income will decrease the purchase of toys by 2 percent.
• D)toys are an inferior good.

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Definitions:

Legal Hourly Minimum Wage

The lowest hourly pay that employers are legally allowed to pay their workers, as mandated by government law.

Secondary Labor Market

Employment sectors characterized by low pay, low job security, and poor working conditions, often distinguished from primary sectors which offer better employment conditions.

Primary Labor Market

Refers to high-skilled, high-paying jobs that usually require a higher level of education or training, often offering benefits and job security.

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A certificate awarded upon successful completion of secondary education, signifying that the recipient has met the required educational standards.