1,If the percentage change in quantity demanded of a good is less than the percentage change...

1,If the percentage change in quantity demanded of a good is less than the percentage change in buyer's income, then the good is said to be

income unit elastic.

income elastic.

price elastic.

price inelastic.

income inelastic

2. Income elasticity of demand for good A is -0.22. Good A is income __________ and is a(n) __________ good.

inelastic; inferior

unit elastic; normal

elastic; normal

elastic; inferior

inelastic; normal

Solutions

Expert Solution

1. If the percentage change in quantity demanded of a good is less than the percentage change in buyer's income, then the good is said to be “income inelastic”

Income inelastic means that demand changes less than the income of the buyer

2. Income elasticity of demand for good A is -0.22. Good A is income “Inelastic” and is a(n) “inferior” good.

When elasticity is less than 1, then demand for that good is inelastic. If good A elasticity is -0.22, then it is inferior good because demand for inferior good fall with rise or change in income

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

21. When consumers respond to a price change but the percentage change in quantity demanded (in...

21. When consumers respond to a price change but the percentage change in quantity demanded (in absolute value) is smaller than the percentage change in price (in absolute value), the demand is described as being _______. Group of answer choices perfectly inelastic perfectly elastic inelastic unit elastic elastic 22. Assume that you manage a car wash, and you have previously calculated the price elasticity of demand to be 1.2 (in absolute value). To draw in more customers, you decide to...

• When a seller decides to change his price for a particular good, will quantity demanded...

• When a seller decides to change his price for a particular good, will quantity demanded change drastically? And what will happen to the total revenue, will it increase or fall? •Will individuals form teams or firms in all settings? •Economic profit is usually lower than accounting profit. A firm that makes zero economic profit is said to be earning normal profit. Is zero economic profit bad for a firm? •Discuss the difference between monopolistic competition and oligopoly. •What makes...

What causes a change in Quantity Demanded? What is the difference between a Normal Good and...

What causes a change in Quantity Demanded? What is the difference between a Normal Good and an Inferior Good? Give an example of each. Why is the market system also referred to as the price system?

what is different between a changed in demanded and a change in quantity demanded?

1. How is a change in demand different from a change in quantity demanded? 2. Using...

1. How is a change in demand different from a change in quantity demanded? 2. Using supply and demand analysis explain what would happen in the market for SUVs if the relative price of gasoline increases. 3. How does rent control on apartments distort the allocation of resources? 4. How can elasticities be used to improve business or firm performance?

31) If the percentage change in the price of a good exceeds the percentage change in...

31) If the percentage change in the price of a good exceeds the percentage change in the quantity supplied, then the supply is A) elastic. B) inelastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic. 33) When the percentage change in the quantity supplied equals the percentage change in price, the supply is A) elastic. B) inelastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic. 34) When the percentage change in the quantity supplied is less than the...

explain the difference between a change in quantity demanded and a change in demand explain the...

explain the difference between a change in quantity demanded and a change in demand explain the difference between a change in quantity supplied and a change in Supply if Mary's demand for a $5 cup of coffee is 2 cups of coffee and wings demand $45 cup of coffee is 3 cups of coffee what is the market demand for a $5 cup of coffee what is the law of demand state what is the relationship between price and quantity...

5. Suppose the quantity of good X demanded by individual 1 is given by X1 =...

5. Suppose the quantity of good X demanded by individual 1 is given by X1 = 10 − 2PX + 0.01I1 + 0.4PY and the quantity of X demanded by individual 2 is X2 = 5 − PX + 0.02I2 + 0.2PY a) What is the market demand function for total X (= X1+X2) as a function of PX, I1, I2, and PY . b) Graph the two individual demand curves (with X on the horizontal axis, PX on the...

1) Suppose the price of a good increases 5%, and the quantity demanded falls 8%. The...

1) Suppose the price of a good increases 5%, and the quantity demanded falls 8%. The ----- of this good is -----. supply, unit elastic demand, perfectly elastic demand, inelastic demand, elasti 2) Suppose that when the price of a good increases from $120 to $132 per unit, the quantity demanded falls from 33 to 30 units. Using the midpoint method calculate price elasticity demand. -1 -1.25 3.0 -0.1 3) Along a straight-line demand curve, demand at higher prices is...

What is the difference between ' change in demand' vs. 'change in quantity demanded'? What are...

What is the difference between ' change in demand' vs. 'change in quantity demanded'? What are the determinants of change in demand?

Subjects