16.The average consumer income increased by 4%, and the quantity demanded of a good decreased by 2%. Which of the following statements is true? A- The income elasticity of demand cannot be determined. B-The income elasticity of demand is 0.5; the good is normal. C-The income elasticity of demand is –0.5; the good is inferior. D- The income elasticity of demand is 2; the good is normal. E- The income elasticity of demand is 2; the good is normal.
16.The average consumer income increased by 4%, and the quantity demanded of a good decreased by 2%. Which of the following statements is true?
A- The income
B-The income elasticity of demand is 0.5; the good is normal.
C-The income elasticity of demand is –0.5; the good is inferior.
D- The income elasticity of demand is 2; the good is normal.
E- The income elasticity of demand is 2; the good is normal.
17. Use the graph to answer the question that follows
If the market was initially in equilibrium and then the price was set at P3, what is the effect on the different surpluses that can be determined without calculations?
A-
B-
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