Suppose the Income Elasticity of Demand Is -0

question 127

Multiple Choice

Suppose the income elasticity of demand is -0.5 for good X.This implies that a 5% decrease in income will cause the quantity demanded of good X to

• A)increase by 2.5%,and X is an inferior good.
• B)decrease by 2.5% and X is a normal good.
• C)increase by 10% and X is an inferior good.
• D)decrease by 10% and X is a normal good.

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Definitions:

Post-split Price

The adjusted price of a stock after a company has completed a stock split.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, reflecting a company's desire to reinvest its profits.

Outstanding Shares

The total number of shares of stock that are currently owned by investors, including restricted shares owned by the company’s officers and insiders.

Distribution

The process of delivering products from the production or service facility to the end user, including storage, transportation, and logistics.