Assume That a 6 Percent Increase in Income in the Economy

question 186

Multiple Choice

Assume that a 6 percent increase in income in the economy produces a 3 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is

• A) negative, and therefore X is an inferior good.
• B) positive but less than one; therefore X is an inferior good.
• C) positive, and therefore X is an inferior good.
• D) positive, and therefore X is a normal good.

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Definitions:

Stratification by Age

The process of categorizing and analyzing data or populations into groups based on age to understand and address age-specific characteristics or needs.

Positivity Effect

The tendency of people, especially as they age, to remember more positive than negative information.

Stratification

A sociological term referring to the classification of individuals or groups into different levels of socioeconomic tiers based on factors like wealth, race, education, etc.

Socioeconomic Status

An individual's or group's position within a hierarchical social structure, which is often determined by a combination of income, education, and occupation.