The Income Elasticity of Demand _____

question 102

Multiple Choice

The income elasticity of demand _____.

• A)must be negative because of the law of diminishing marginal utility
• B)could be positive or negative or zero,depending on the nature of the good
• C)must be positive because consumers tend to buy more at higher incomes
• D)is usually zero because "you can only have so much"
• E)can never be zero

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Definitions:

Agency Coupled With An Interest

An agency relationship that is created for the benefit of the agent, not the principal.

Agency Agreement

A contract where one party (the agent) agrees to act on behalf of another party (the principal) in commercial transactions.

Principal

The amount of money originally invested or loaned, in contrast to interest or profit earned on that amount.

Partially Disclosed

Pertains to transactions or agreements where some but not all relevant information is revealed to one or more parties involved.