If Jack Bought 12 DVDs Last Year When His Income

question 89

Multiple Choice

If Jack bought 12 DVDs last year when his income was $40,000 and he buys 14 DVDs this year when his income is $43,000, then his income elasticity of demand is ______________ which means that DVDs are a(n) ______________ good for Jack.

• A)+0.41; normal
• B)-0.47; inferior
• C)+2.13; normal
• D)+0.59; inferior
• E)-2.13; inferior

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Definitions:

Credit Terms

The conditions under which credit will be extended to a customer, including the repayment period, interest rate, and any discounts for early payment.

Gross Margin Ratio

A financial metric expressing the percentage of revenue that exceeds the cost of goods sold, used to assess a company's financial health.

Net Sales

The total revenue from sales of products or services less returns, allowances, and discounts.

Cost of Goods Sold

The direct expenses related to producing goods sold by a company, including material costs and direct labor, essential for calculating a company's gross profit.