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Author Question: If the income elasticity of demand for a service is 0.6, then a 5 percent increase in income will ... (Read 92 times)

fnuegbu

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on: Jul 1, 2018
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


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juiceman1987

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Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

D


fnuegbu

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Reply 2 on: Jul 1, 2018
Thanks for the timely response, appreciate it

epscape

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Reply 3 on: Yesterday
Excellent

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