If a 5 Percent Increase in Income Leads to a 10

question 88

Multiple Choice

If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product, this product is

• A)an income elastic good.
• B)an inferior good.
• C)a necessity.
• D)a luxury good.

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Definitions:

Freight Costs

Charges incurred for transporting goods between locations, typically from the manufacturer to the buyer.

New Equipment

Assets recently acquired by a business for operational purposes, such as machinery, computers, or office furniture.

Government Permits

Official permissions granted by governmental bodies that allow individuals or companies to conduct certain activities that would otherwise be prohibited.

Develop Land

The process of making land suitable for construction or other use, which may involve clearing, grading, and installing infrastructure such as roads and utilities.