For a Good Such as Food,the Income Elasticity Is Likely

question 50

Multiple Choice

For a good such as food,the income elasticity is likely

• A) negative.
• B) equal to zero.
• C) positive and less than one.
• D) positive and greater than one.
• E) undefined because people always buy the same amount of food.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Fixed Costs

Expenses that do not change in proportion to the level of goods or services produced within a certain period.

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor.

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.