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

question 94

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

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Definitions:

Monetary Rewards

Financial incentives given to employees or individuals as recognition for their work, achievements, or performance.

Expert Power

is the influence one possesses due to their skills or expertise, which others recognize, leading to respect and the power to influence decisions or actions.

Specialized Knowledge

Expertise or skills in a specific field, often acquired through extensive training and experience, contributing to an individual's or organization's competency.

Position Power

The power or authority attributed to someone based on their office, rank, or role within an organization.