When Income Increases by 1%,the Quantity Demanded of a Good

question 11

Essay

When income increases by 1%,the quantity demanded of a good decreases by 2%.What is the income elasticity of the good? Is the good normal or inferior? Why?

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Definitions:

Flattering Others

The act of giving excessive or insincere praise to gain favor or advantage.

Perceptual Distortions

Misinterpretations or misconceptions of a real situation due to misapplication of sensory impressions.

Stereotypes

Oversimplified generalizations about a group of people without considering individual differences, often leading to prejudiced attitudes or behaviors.

Halo Effects

A cognitive bias where an observer's overall impression of a person, brand, or product influences their feelings and thoughts about that entity's character or properties.