Examlex

Solved

If Income Rises and the Demand for a Product Remains

question 164

True/False

If income rises and the demand for a product remains unchanged, the income elasticity of demand for that product is unit elastic.


Definitions:

Deadweight Loss

The loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable.

Marginal Cost

The boost in comprehensive expenditure that comes from the generation of one more unit of a product or service.

Socially Efficient

A situation in which an allocation of resources maximizes total social welfare, taking into account both the benefits and costs to society as a whole.

Marginal Costs

The increase in cost due to the production of an extra unit of a product or service.

Related Questions