Multiple Choice
Suppose the income elasticity of demand for toys is +2.0. This means that
A) a 10 percent increase in income will increase the purchase of toys by 20 percent.
B) a 10 percent increase in income will increase the purchase of toys by 2 percent.
C) a 10 percent increase in income will decrease the purchase of toys by 2 percent.
D) toys are an inferior good.
Correct Answer:
Verified
Correct Answer:
Verified
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