The Income Elasticity of Demand for a Food Is Unity

question 121

Multiple Choice

The income elasticity of demand for a food is unity.A consumer's monthly income is $2,000,of which 20 percent is spent on food.If income doubles,the amount spent on food will be:

• A) $400 per month.
• B) $500 per month.
• C) $800 per month.
• D) $1,000 per month.

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Definitions:

Terms

Conditions under which a sale is made, including payment timeframe, discounts, and penalties for late payment.

Discount

A reduction from the usual cost of something, or the act of lowering the price of goods, services, or securities.

Day

A 24-hour period from midnight to midnight.

Income

The money received, especially on a regular basis, for work or through investments.