The Income Elasticity of Demand Is the Percentage Change in the ________

question 226

Multiple Choice

The income elasticity of demand is the percentage change in the ________ divided by the percentage change in ________.

• A) quantity demanded; the price of a substitute or complement
• B) quantity supplied; price
• C) quantity demanded; price
• D) quantity demanded; income
• E) quantity demanded when income changes; the quantity supplied

---

Definitions:

Diminishing Marginal Utility

The principle that says additional units of a good or service provide less added satisfaction than previous units.

Risk-Averse

describes an individual or entity that prefers to minimize risk, choosing options that are deemed safer or involve less uncertainty.

Insurance Premiums

Payments made to an insurance company in exchange for coverage against specified risks over a period.

Demanders Of Insurance

Individuals or entities that seek to protect themselves against financial losses by buying insurance policies.