Suppose That the Income Elasticity of Demand for New Clothes

question 179

Multiple Choice

Suppose that the income elasticity of demand for new clothes is positive. Other things being equal, which of the following statements is CORRECT?

• A) New clothes are a normal good.
• B) The quantity demanded of new clothes decreases as a consumer's income declines.
• C) There exists a positive relationship between income and the demand for new clothes.
• D) all of the above

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Definitions:

Cobbles

Rounded or semi-rounded rocks ranging in size, generally used in paving or construction.

Marine Environments

Ecosystems found in the ocean, ranging from deep sea to coastal areas, supporting a wide range of life forms.

Corals

Marine invertebrates in the class Anthozoa of phylum Cnidaria, typically living in compact colonies of many identical individual polyps that build up coral reefs, important for marine biodiversity.

Reefs

Marine structures composed mainly of coral and other biogenic material, typically forming in shallow, warm water environments.