If Income Increases One Percent, and Demand Increases Five Percent

question 60

Multiple Choice

If income increases one percent, and demand increases five percent, then the price elasticity of the good is:

• A) Inelastic
• B) Elastic
• C) Unitary elastic
• D) Not enough information to know

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Definitions:

Work

A physical or mental activity that accomplishes or produces something, either goods or services.

Globalization

The growth and spread of investment, trade, production, communication, and new technology around the world.

Spread of Investment

The diversification of investments across different sectors, assets, or geographies to reduce risk and achieve a more stable return.

Production

The process of creating goods and services through the combination of labor, materials, and technology.