Say That a Consumer's Income Elasticity of Demand Over the Relevant

question 14

Multiple Choice

Say that a consumer's income elasticity of demand over the relevant range is equal to 2. When she has a monthly income of $2,000, she spends $600 on food. If her monthly income rose to $4,000, how much would she spend on food?

• A)​$900.
• B)​$1200.
• C)​$1800.
• D)​$2400.

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Definitions:

Government Activity

Actions or initiatives undertaken by the state or governmental bodies to govern, regulate, or manage public affairs.

Public Choice Analysis

An economic framework that applies theories and methods traditionally used to analyze market behavior to political decision-making.

Budget Deficits

A situation where a government's expenditures exceed its revenue over a specified period, leading to borrowing or the depletion of reserves.

Budget Surpluses

The situation in which a government's revenues exceed its expenditures during a specific period of time, allowing for savings or debt reduction.