Last Year, Joan Bought 50 Kilograms of Hamburger When Her

question 157

Multiple Choice

Last year, Joan bought 50 kilograms of hamburger when her household income was $40 000.This year, her household income was only $30 000 and Joan bought 60 kilograms of hamburger.Holding everything else constant, Joan's income elasticity of demand for hamburger is:

• A)positive, so Joan considers hamburger to be an inferior good.
• B)negative, so Joan considers hamburger to be an inferior good.
• C)positive, so Joan considers hamburger to be a normal good and a necessity.
• D)negative, so Joan considers hamburger to be a normal good.

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Definitions:

Linear Demand Curve

A straight-line graphical representation showing the inverse relationship between the price of an item and the quantity demanded.

Total Revenue

The total income generated by a company from its sales of goods or services before any costs are subtracted.

Deadweight Loss

Economic inefficiency that occurs when equilibrium is not attained or unattainable for a specific good or service.

Airline Industry

A sector of the economy that provides air transport services for passengers and cargo, characterized by high levels of regulation and competition.