Suppose the Income Elasticity of Demand for Toys Is +2

question 123

Multiple Choice

Suppose the income elasticity of demand for toys is +2.00. This means that

• A) a 10 percent increase in income will increase the purchase of toys by 20 percent.
• B) a 10 percent increase in income will increase the purchase of toys by 2 percent.
• C) a 10 percent increase in income will decrease the purchase of toys by 2 percent.
• D) toys are an inferior good.

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