Income Elasticity of Demand Measures the Extent to Which

question 15

Multiple Choice

Income elasticity of demand measures the extent to which

• A)the price of a good changes when there is a change in income.
• B)the quantity demanded of a good changes when income changes.
• C)real household income changes when there is a change in the price of a good.
• D)one household's income changes when there is a change in the income of another household.
• E)quantity demanded changes when there is a change in price.

---

Definitions:

Tortilla Chip

A snack food made from corn tortillas cut into wedges and then fried or baked, commonly served with dips or used in dishes like nachos.

Product-line Pricing

A pricing strategy where different products within the same category are priced differently based on features, benefits, and cost of production.

Line Item Pricing

A pricing method where each individual item or service is priced separately rather than bundled together.

Discretionary Pricing

A pricing strategy where the seller has the flexibility to set prices based on market conditions, costs, or personal judgment.