Asked by Bryce Bloomquist on Jul 12, 2024
Verified
The income elasticity of demand
A) measures the change in income necessary for a given change in quantity demanded.
B) measures the responsiveness of income to changes in quantity demanded.
C) measures the responsiveness of quantity demanded to changes in income.
D) is the ratio of the percentage change in income to the percentage change in quantity demanded.
Income Elasticity
A measure of how much the demand for a good or service changes in response to a change in consumers' income.
Quantity Demanded
The aggregate quantity of a product or service that buyers are ready and capable of buying at a specific price point.
Changes
Variations or modifications that occur in any system, context, or entity over time.
- Interpret the significance of income elasticity of demand for various goods.
Verified Answer
AR
Aparna ReddyJul 18, 2024
Final Answer :
C
Explanation :
Income elasticity of demand measures how the quantity demanded of a good responds to a change in consumers' income, indicating whether the good is a necessity or a luxury.
Learning Objectives
- Interpret the significance of income elasticity of demand for various goods.
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