For Which Product Is the Income Elasticity of Demand Most

question 123

Multiple Choice

For which product is the income elasticity of demand most likely to be positive?

• A) Retreaded tires
• B) Cabbage
• C) Used clothing
• D) Computers

---

Definitions:

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing profit beyond the normal rate of return.

Opportunity Cost

The loss of potential gain from other alternatives when one particular alternative is chosen.

Savings Account

A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the efficiency with which a company utilizes its resources.