If Income Elasticity of Demand for Food Is 1

question 43

Multiple Choice

If income elasticity of demand for food is 1.55 it follows that

• A)a 10 percent rise in the price of food lowers the quantity demanded of food by 15.5 percent.
• B)if income rises by 10 percent,consumption of food rises by 15.5 percent.
• C)if income rises by 10 percent,consumption of food falls by 15.5 percent.
• D)a 1 percent rise in the price of food decreases the quantity demanded of food by 1.55 percent.
• E)none of the above

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