Assume That a 4 Percent Increase in Income Results in a 2

question 73

Multiple Choice

Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good.The income elasticity of demand for the good is

• A) negative and therefore the good is an inferior good.
• B) negative and therefore the good is a normal good.
• C) positive and therefore the good is a normal good.
• D) positive and therefore the good is an inferior good.

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Definitions:

Fast Food

A type of food service that emphasizes minimal preparation time and quick service, often associated with preheated or precooked ingredients served in a packaged form for take-away.

Probability Mass Function

An operation that calculates the chance that a given discrete random variable precisely equals a certain value.

Probability Density Function

A mathematical function that describes the likelihood of a continuous random variable taking on a specific value.

Normal Distribution

A bell-shaped frequency distribution that is symmetrical about the mean, describing how many data points, given continuous variables, distribute in nature.