If the Quantity Demanded for a Good Rises as Income

question 18

Multiple Choice

If the quantity demanded for a good rises as income rises then the income elasticity of demand for this good is ________ than 0, and the good is ________ good.

• A)greater; an inferior
• B)less; a normal
• C)less; an inferior
• D)greater; a normal

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Definitions:

Economically Efficient

A situation where resources are allocated in a way that maximizes the net benefit to society.

Barriers To Entry

Factors that make it difficult for new firms to enter an industry, such as high initial investment, legal restrictions, or strong brand loyalty among consumers.

Network Effects

The phenomenon whereby increased numbers of people or participants improve the value of a good or service.

Economies Of Scale

The benefit that larger operations have, which allows them to produce goods or services at a lower unit cost as production scales up.