If the income elasticity of demand for a service is 0.6, then a 5 ...

[fnuegbu]

If the income elasticity of demand for a service is 0.6, then a 5 percent increase in income will generate a __________ in quantity demanded
 a. 3 percent decrease
  b. 3 percent increase
  c. 8.33 percent decrease
  d. 8.33 percent increase
  e. 0.12 percent decrease

Question 2

A 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a service. This service is a(n) __________ good and demand is __________.
 a. normal; elastic
  b. normal; inelastic
  c. normal; unit elastic
  d. inferior; elastic
  e. inferior; inelastic

[juiceman1987]

Answer to Question 1

B

Answer to Question 2

D

[fnuegbu]

TYSM

[xthemafja]

Gracias!