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*4* Assume that when consumer income increases ten percent (+10%), the demand for grits increases five percent (+5%). The income elasticity of demand for good "X" is: O+2.0 and good "X" is a "normal good." +0.5 and good "X" is a "normal good." O +0.5" and the demand for good "X" is "relatively inelastic." O-0.5 and good "X" is an "inferior good." O+2.0" and the demand for good "X" is "relatively elastic."

*4* Assume that when consumer income increases ten percent (+10%), the demand for grits increases five percent (+5%). The income elasticity of demand for good "X" is: O+2.0 and good "X" is a "normal good." +0.5 and good "X" is a "normal good." O +0.5" and the demand for good "X" is "relatively inelastic." O-0.5 and good "X" is an "inferior good." O+2.0" and the demand for good "X" is "relatively elastic."

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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*4* Assume that when consumer income increases ten percent (+10%), the demand for grits increases five percent (+5%). The income elasticity of demand for good "X" is: O+2.0 and good "X" is a "normal good." +0.5" and good "X" is a "normal good." O"+0.5" and the demand for good "X" is "relatively inelastic." O-0.5 and good "X" is an "inferior good." O+2.0 and the demand for good "X" is "relatively elastic."
Transcribed Image Text:*4* Assume that when consumer income increases ten percent (+10%), the demand for grits increases five percent (+5%). The income elasticity of demand for good "X" is: O+2.0 and good "X" is a "normal good." +0.5" and good "X" is a "normal good." O"+0.5" and the demand for good "X" is "relatively inelastic." O-0.5 and good "X" is an "inferior good." O+2.0 and the demand for good "X" is "relatively elastic."
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