While in College,John and Bethany Each Buy Five Packages of Mac-N-Cheese

question 202

Multiple Choice

While in college,John and Bethany each buy five packages of mac-n-cheese per week.After they graduate and have full-time jobs,John buys six packages per week,but Bethany buys only two packages per week.When looking at income elasticity of demand for mac-n-cheese,John's

• A)is negative,and Bethany's is positive.
• B)is positive,and Bethany's is negative.
• C)is zero,and Bethany's approaches infinity.
• D)approaches infinity,and Bethany's is zero.

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Definitions:

Interest Rate

The percentage charged on borrowed money, or earned through deposited funds, over a period of time.

Lottery

A form of gambling that involves the drawing of numbers at random for a prize.

Annuity Due

A type of annuity with payments made at the beginning of each period, rather than at the end, typically utilized in lease and loan agreements.

End-of-Period Payments

Payments made at the conclusion of a payment period, commonly used in the context of loans or leases.