Assume That a 4 Percent Increase in Income Results in a 2

question 94

Multiple Choice

Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is

• A)negative, and the good is an inferior good.
• B)negative, and the good is a normal good.
• C)positive, and the good is a normal good.
• D)positive, and the good is an inferior good.

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Definitions:

Decreased Significantly

A notable reduction or decline in a quantity, extent, or importance of a particular phenomenon or measurement.

Cognition

The brain's process of learning and understanding obtained through thinking, life experiences, and the use of the senses.

Unconscious Drive

Internal motivations that influence behavior and thought processes without the individual’s awareness.

Interpretation

The process of making sense of or assigning meaning to data, actions, words, or events, often used in the analysis phase of research or literary study.