Multiple Choice
The demand for good X is given by ln Qxd = 120 − 0.9 ln Px + 1.5 ln Py − 0.7 ln M.Which of the following statements is correct?
A) X has constant income elasticity.
B) An economic downturn will decrease demand for X.
C) A 15 percent increase in income would increase demand for X by 10.5 percent.
D) X has a constant income elasticity, and an economic downturn will decrease the demand for X.
Correct Answer:
Verified
Correct Answer:
Verified
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