If You Spend a Large Portion of Your Income on a Good

question 236

Multiple Choice

If you spend a large portion of your income on a good,

• A) supply of that good would be price elastic.
• B) demand for that good is more elastic than if you spent a smaller portion of your income on the good.
• C) supply of that good is price inelastic.
• D) demand for that good is less elastic than if you spent a smaller portion of your income on the good.
• E) the good must be able to be produced at a constant (or gently rising) opportunity cost.

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Definitions:

Earnings Per Share

A measure of a company's profitability that calculates how much of the net income is available per share of stock.

Year 2

Refers to the second year of a particular time frame, often used in financial analysis to denote the second year of operations, investments, or accounting periods.

Price-Earnings Ratio

A valuation metric comparing the current share price of a company to its per-share earnings.

Year 2

A reference to the second year in a time series analysis or the second year of a company's operations or financial reporting.