If Income Elasticity for a Particular Good Has a Negative

question 5

Multiple Choice

If income elasticity for a particular good has a negative sign:

• A)the good is a normal good.
• B)as income increases,consumers will tend to purchase more of the good.
• C)as income increases,consumers will tend to purchase less of the good.
• D)the good is a luxury good.

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Definitions:

Labor Shortages

A situation in which employers have difficulty filling positions with qualified candidates, often due to a lack of available or skilled workers.

Short-Run Aggregate Supply

The aggregate volume of products and services that companies intend to sell within a brief period in the economy, based on existing price levels.

Long-Run Aggregate Supply

Represents the total production of goods and services in an economy at full employment, without any market frictions.

Aggregate Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in an economy.