« previous next »

Author Question: Suppose a 4 percent increase in income results in a 2 percent decrease in the quantity demanded of a ... (Read 234 times)

abarnes

  • Hero Member
  • *****
  • Posts: 556
on: Jun 29, 2018
Suppose a 4 percent increase in income results in a 2 percent decrease in the quantity demanded of a good. Calculate the income elasticity of demand for the good and determine what type of good it is.
 
  What will be an ideal response?

Question 2

Adverse selection is a situation in which one party to an economic transaction has less information than the other party.
 
  Indicate whether the statement is true or false
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
Buy Test-Bank


scottmt

  • Sr. Member
  • ****
  • Posts: 322
Reply #1 on: Jun 29, 2018
Answer to Question 1

Income elasticity of demand = -0.5. The good is inferior.

Answer to Question 2

FALSE


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

After a vasectomy, it takes about 12 ejaculations to clear out sperm that were already beyond the blocked area.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Eating food that has been cooked with poppy seeds may cause you to fail a drug screening test, because the seeds contain enough opiate alkaloids to register as a positive.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

The experimental design and results of Lester and Gorzalka (1988). On the third test, the female ... The experimental design and results of Lester and Gorzalka (1988). On the third test, the female ...
Increase in rainfall on continents Increase in rainfall on continents
Income Distribution in the United States, 2009 Income Distribution in the United States, 2009
Intergenerational Income Mobility in the United States Intergenerational Income Mobility in the United States
Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ... Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ...
Twenty percent of the automobiles inspected at a state inspection station required repairs to ... Twenty percent of the automobiles inspected at a state inspection station required repairs to ...
Video: Introduction to Human Immunodeficiency Virus (HIV)

For a complete list of videos, visit our video library