Studies Show That the Income Elasticity of Demand for Wine

question 212

Multiple Choice

Studies show that the income elasticity of demand for wine is 5.03 and the income elasticity of demand for spirits is 1.21.This indicates that

• A)wine and spirits are luxury goods.
• B)wine is a luxury good and spirits are inferior goods.
• C)wine and spirits are highly price elastic.
• D)wine is a luxury good and spirits are necessities.

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Definitions:

Afferent Arteriole

Branch of an interlobular artery of the kidney that conveys blood to the glomerulus.

Arcuate Artery

Artery that originates from the interlobar arteries of the kidney and forms an arch between the cortex and medulla of the kidney.

Simple Cuboidal Epithelium

A single layer of cube-shaped cells common in glandular ducts and parts of the kidney, specialized for secretion and absorption.

Proximal Convoluted Tubule

A segment of the nephron in the kidney which reabsorbs water, ions, and nutrients from the filtrate.