Which of the Following Statements Correctly Characterizes the Elasticity of Demand

question 17

Multiple Choice

Which of the following statements correctly characterizes the elasticity of demand for food?

• A) While food demand is not very responsive to changes in price, increases in income produce big increases in the demand for food.
• B) As income increases, the quantity demanded of food decreases.
• C) If the price of food falls by 5 percent, quantity demanded will rise by less than 5 percent.
• D) People consume the same amount of food regardless of the price of food.

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Definitions:

Fairness

The quality of making judgments that are free from discrimination, dishonesty, or injustice.

Ultimatum Game

A game in economic experiments where one player proposes how to divide a sum of money with another, who can accept or decline the offer, with both getting nothing if declined.

Dictator Game

An experimental economics game that measures how fairly individuals allocate resources when they have complete control over distribution.

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The act of buying or selling goods and services in a market, involving a transfer of money and ownership.