This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What does the sign (positive/negative) of the income elasticity tell us about a good? What will ... (Read 74 times)

ssal

  • Hero Member
  • *****
  • Posts: 572
on: Jun 29, 2018
What does the sign (positive/negative) of the income elasticity tell us about a good?
 
  What will be an ideal response?

Question 2

How does a consumer's budget set differ from his budget constraint? For a consumer with a given level of income, will the budget set have more combinations of goods or will the number of combinations be higher for the budget constraint?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

nguyenhoanhat

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 29, 2018
Answer to Question 1

The sign of the income elasticity of demand reveals whether a good is a normal good or an inferior good: The income elasticity of demand is positive for normal goods and negative for inferior goods.

Answer to Question 2

The budget set is the set of all possible bundles of goods and services that a consumer can purchase with his income, irrespective of whether the entire income is used. The budget constraint represents only those bundles that exhaust the consumer's income. Therefore, the budget set has more consumption bundles than the budget constraint.


ssal

  • Member
  • Posts: 572
Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review

shewald78

  • Member
  • Posts: 340
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

cullens sign cullens sign
Age at First Sign of Psychotic Symptoms in Schizophrenic Patients Age at First Sign of Psychotic Symptoms in Schizophrenic Patients
Sign on methanol pump shows that methyl alcohol is a poison and can cause skin irritation and other ... Sign on methanol pump shows that methyl alcohol is a poison and can cause skin irritation and other ...
When the exhaust is lean, the PCM applies a positive current into the pump cell. When the exhaust is lean, the PCM applies a positive current into the pump cell.
How to find two positive angles less than 360° that have a tangent of −2.25 How to find two positive angles less than 360° that have a tangent of −2.25
Good contact feels full, confident, and deliberate and establishes a warm connection between massage ... Good contact feels full, confident, and deliberate and establishes a warm connection between massage ...
Video: Activation Energy - Valence Electrons

For a complete list of videos, visit our video library