The Income Elasticity of Demand Is

question 252

Multiple Choice

The income elasticity of demand is

• A) positive for a normal good.
• B) zero for an inferior good.
• C) less than one for an income elastic normal good.
• D) Only answers A and B are correct.
• E) Answers A, B, and C are correct.

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Definitions:

Contagion Theory

One of the earliest theories of collective action; suggests that individuals who join a crowd can become “infected” by a mob mentality and lose the ability to reason.

Collective Behavior

Behavior that follows from the formation of a group or crowd of people who take action together toward a shared goal.

Large Numbers

Numerical values that are significantly larger than those ordinarily encountered in daily life or in specific contexts, often requiring special methods for understanding or computation.

Social Revolutions

Significant, rapid, and often violent changes in society's structures, particularly those related to political power and class structures.