Assume the Income Elasticity of a Good Has Been Calculated

question 98

Multiple Choice

Assume the income elasticity of a good has been calculated to be +0.83.Based on this information,we can infer that the good is:

• A)a normal good and a luxury.
• B)an inferior good and a necessity.
• C)a normal good and a necessity.
• D)an inferior good and a luxury.

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Definitions:

Linear Programming

A mathematical method for determining a way to achieve the best outcome in a given mathematical model for some list of requirements represented as linear relationships.

Sensitivity Analysis

A method used to predict the outcome of a decision under various scenarios by changing one or more variables while keeping others constant.

Variables

Elements, features, or factors that are likely to vary or change; can be quantitative or qualitative in research and statistical analysis.

Shadow Price

A theoretical price representing the cost or benefit of having one additional unit of a particular resource in a constraint optimization problem.