If the Income Elasticity of Demand for a Good Is

question 30

Multiple Choice

If the income elasticity of demand for a good is greater than one, it implies that:

• A) as consumers' incomes increase, the quantity demanded of the good falls.
• B) sales of the good are highly sensitive to changes in consumers' income.
• C) the quantity demanded of the good increases during a recession.
• D) an increase in consumers' income will lead to a proportionate increase in sales of the good.
• E) sales of the good are highly sensitive to changes in the prices of other goods.

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Definitions:

Seniority-Based

A system where decisions regarding layoffs, promotions, and other job-related benefits are made based on the length of time an employee has worked at an organization.

Merit Bonuses

Compensation rewards given to employees based on their performance, as a way to incentivize higher productivity or achievement of certain goals.

Skill-Based Pay

A compensation system that bases employee pay on the skills and knowledge they possess, rather than their job position or title.

Sociotechnical System

An approach to complex organizational work design that recognizes the interaction between people and technology in workplaces.