If the Income Elasticity of Demand for a Good Is

question 43

Multiple Choice

If the income elasticity of demand for a good is 0.5,then

• A)it is a normal good,and its demand curve will shift to the left if buyers' incomes increase
• B)it is a normal good,and its demand curve will shift to the right if buyers' incomes increase
• C)it is an inferior good,and its demand curve will shift to the right if buyers' incomes increase
• D)it is an inferior good,and its demand curve will shift to the left if buyers' incomes increase
• E)there is insufficient information to determine whether the good is normal or inferior

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Definitions:

Long-Term

Refers to assets, liabilities, or financial investments that are expected to be realized or mature beyond one year.

Historical Cost

The original monetary value of an asset or investment at the time of its acquisition or payment.

Exposure Draft

A document issued by accounting and regulatory bodies for public comment that proposes new or changes to existing accounting policies.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an orderly transaction between willing participants.