Since the Income Elasticity for Food Is Estimated to Be

question 17

Multiple Choice

Since the income elasticity for food is estimated to be 0.51, it appears that the proportion of income spent by poor people on food is ____ the proportion spent by those with higher incomes.

• A) greater than
• B) less than
• C) about the same as
• D) about half as great as

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Definitions:

Materials Price Variance

A financial measure used to determine the variation in the cost of raw materials against the pre-defined standard cost.

Raw Materials Inventory

The stock of basic materials that are to be used in production but have not yet been processed.

Cash Account

An account recording the transactions involving cash inflows and outflows.

Direct Labor Costs

These refer to the expenses associated with paying workers who directly manufacture or produce the goods and services.