If Average Consumer Incomes Increase Proportionately Faster Than the Demand

question 92

Multiple Choice

If average consumer incomes increase proportionately faster than the demand for a product,then the income elasticity of demand for the product is:

• A) zero.
• B) greater than zero but less than 1.
• C) greater than 1.
• D) equal to 1.

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Definitions:

Dispositional Factors

These are inherent personality traits and characteristics that influence an individual's behavior and reactions to situations.

Situational Factors

External influences on an individual’s behavior or performance that are determined by the circumstances or environment.

Heider

Fritz Heider, an Austrian psychologist known for his work in attribution theory, focusing on how individuals infer the causes of behavior.

Basic Assumption

A fundamental belief or principle that is accepted as true without proof, often serving as the basis for further reasoning or behavior.