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If Incomes Fall by 5 Percent and the Quantity Demanded

Question 40

Multiple Choice

If incomes fall by 5 percent and the quantity demanded for new cars falls by 10 percent,


A) New cars are a normal good,and the income elasticity is +.5.
B) New cars are an inferior good,and the income elasticity is +2.0.
C) New cars are a normal good,and the income elasticity is +2.0.
D) New cars are an inferior good,and the income elasticity is +0.5.

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