If the Demand for a Product Has an Income Elasticity

question 56

Multiple Choice

If the demand for a product has an income elasticity of -3.4,we can conclude that

• A)an increase in income will lead to an increase in demand for the product.
• B)the product is certainly a necessity.
• C)the product is a normal good.
• D)the product has a rising income-consumption curve.
• E)a decrease in income will lead to an increase in demand for the product.

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Definitions:

Inelastic Demand

A situation where the demand for a product does not change significantly when the price of that product changes.

Agricultural Products

Commodities produced through farming and agriculture, such as crops and livestock, intended primarily for consumption and use.

U.S. Farmers

Individuals and entities in the United States engaged in agriculture, producing crops and livestock for consumption.

Farm Harvests

The process or period of gathering mature crops from the fields, which is crucial for food production and agricultural commerce.