Which of the Following Items Is Likely to Have the Highest

question 156

Multiple Choice

Which of the following items is likely to have the highest income elasticity of demand?

• A)a luxury cruise to several European countries
• B)water
• C)breakfast cereal
• D)a hamburger

Calculate simple interest rates and understand their implications on loans and investments.

Understand the concept of economic profit in comparison to the return on investment and interest rates in the market.

Distinguish between households and firms in terms of supply and demand in the capital market.

Recognize the role and impact of retained earnings on corporate investment and shareholder value.