The Quantity Demanded for Cosmetic Surgery Increased by 12 Percent

question 160

Multiple Choice

The quantity demanded for cosmetic surgery increased by 12 percent following a period of strong economic growth that raised consumer income by 4 percent. What type of good is cosmetic surgery?

• A) It is a luxury good since the income elasticity of demand exceeds 1.
• B) It is a normal good since the income elasticity is less than 1.
• C) It is a necessity since the income elasticity of demand is equal to 1.
• D) It is a supernormal good since the income elasticity is greater than 2.

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Definitions:

International Trade

The exchange of goods, services, and capital across international borders, driven by the concept of comparative advantage and differing resource endowments.

International Border

The officially recognized boundary separating two sovereign countries, regulating the flow of people, goods, and services across territories.

International Payments

Transactions between countries for goods, services, and financial assets.

Goods Exports

The selling and shipment of physical products from one country to another.