If the Percentage Change in the Quantity Consumed of Pizza

question 137

Multiple Choice

If the percentage change in the quantity consumed of pizza is 8% and the percentage change in income is 2%, what is the income elasticity of demand for pizza?

• A) -0.25
• B) 4
• C) 0.25
• D) -4
• E) -1

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Definitions:

End-of-period Spreadsheet

A financial document used to summarize account balances and adjustments at the end of an accounting period, facilitating the preparation of financial statements.

Accounting Records

Documents and books that capture all the financial transactions of a business or individual.

Closing Process

The procedure in accounting that involves the transfer of all income and expense account balances to the retained earnings to prepare the ledger for the next accounting period.

Real Accounts

Accounts that relate to assets, liabilities, and equity, which are not closed at the end of the accounting period and carry their balances into future periods.