If a 5 Percent Increase in Income Leads to a 10

question 116

Multiple Choice

If a 5 percent increase in income leads to a 10 percent increase in quantity demanded for airline travel, then airline travel is

• A)a necessity.
• B)a substitute for another good.
• C)a luxury.
• D)an inferior good.

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Definitions:

Durable Goods

Goods not for immediate consumption that can be used over a period of time, such as appliances, cars, and furniture.

Business Inventories

The stocks of goods and materials that firms hold for the purpose of sale or input into production, often used to meet consumer demand or continue production.

Welfare Benefits

Financial assistance provided by the government to individuals or groups in need, aiming to support well-being and economic stability.

Stocks And Bonds

Stocks and bonds are financial instruments; stocks represent ownership shares in a company, while bonds are debt securities issued by entities like governments or corporations to raise capital.