If a Good Is Inferior,then It Has an Income Elasticity

question 164

Multiple Choice

If a good is inferior,then it has an income elasticity of demand that is

• A) equal to zero.
• B) greater than zero.
• C) less than zero.
• D) greater than one.
• E) undefined.

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Definitions:

Total Variable Costs

The sum total of all costs that vary with the level of output or production volume, such as materials and labor directly involved in production.

Level Of Activity

A term that refers to the volume or quantity of production or work completed in a business operation, which can significantly impact costs and efficiency.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and labor costs.

Total Dollar Amount

The sum total in dollar value of all items considered in a transaction, report, or calculation.