If a 10 Percent Increase in Income Leads to a 5

question 44

Multiple Choice

If a 10 percent increase in income leads to a 5 percent decrease in the demand for a good,the income elasticity of demand equals ________ and the good is ________ good.

• A) 1/2; a normal
• B) -1/2; an inferior
• C) 2; a normal
• D) -2; a normal
• E) -5; an inferior

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Definitions:

Deferred Exploration Expenditure

Costs incurred in the exploration of resources which are not immediately expensed but are capitalized and amortized over time.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.

Sundry Liabilities

Various small or infrequent debts and liabilities not classified in the main liabilities categories on a company's balance sheet.

One-Line Method

A consolidation technique, often used in accounting for investments, where only the net income and not the detailed financial activities of an affiliate are included in the parent company's financial statements.