Asked by Megan McDermott on May 02, 2024
Verified
For which of the following goods is the income elasticity of demand likely lowest?
A) Water
B) Pineapples
C) Sapphire pendant necklaces
D) Yachts
Income Elasticity of Demand
A gauge for the sensitivity of demand for an item to shifts in the income levels of buyers.
Sapphire Pendant Necklaces
Jewelry items consisting of pendants made from the gemstone sapphire, typically hung on a chain or necklace.
- Learn the theory of income elasticity of demand and its implementation in assessing whether goods fall into the category of normal or inferior.
- Determine the characteristics of goods based on their income elasticity values.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
A
Explanation :
Water is a basic necessity, and its demand is less sensitive to changes in income compared to luxury items like sapphire pendant necklaces and yachts, or even non-essential food items like pineapples.
Learning Objectives
- Learn the theory of income elasticity of demand and its implementation in assessing whether goods fall into the category of normal or inferior.
- Determine the characteristics of goods based on their income elasticity values.
Related questions
Last Year, Damaris Bought 8 Burgers When Her Income Was ...
If the Income Elasticity of Demand for a Good Is ...
The Income Elasticity of Demand Is Defined as the Percentage ...
Cross-Price Elasticity Is Used to Determine Whether Goods Are Inferior ...
Normal Goods Have Negative Income Elasticities of Demand, While Inferior ...