The citizens of Lilliput spend a higher fractionof their income on food than do the citizens ofBrobdingnag. The reason could be thata. Lilliput has lower food prices, and the priceelasticity of demand is zero.b. Lilliput has lower food prices, and the priceelasticity of demand is 0.5.c. Lilliput has lower income, and the incomeelasticity of demand is 0.5.d. Lilliput has lower income, and the incomeelasticity of demand is 1.5.
The citizens of Lilliput spend a higher fractionof their income on food than do the citizens ofBrobdingnag. The reason could be thata. Lilliput has lower food prices, and the priceelasticity of demand is zero.b. Lilliput has lower food prices, and the priceelasticity of demand is 0.5.c. Lilliput has lower income, and the incomeelasticity of demand is 0.5.d. Lilliput has lower income, and the incomeelasticity of demand is 1.5.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The citizens of Lilliput spend a higher fraction
of their income on food than do the citizens of
Brobdingnag. The reason could be that
a. Lilliput has lower food prices, and the price
elasticity of
b. Lilliput has lower food prices, and the price
elasticity of demand is 0.5.
c. Lilliput has lower income, and the income
elasticity of demand is 0.5.
d. Lilliput has lower income, and the income
elasticity of demand is 1.5.
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