1. Kate's income is increased by 25%. Her quantity demanded of restaurant meals increases from 10...
1. Kate's income is increased by 25%. Her quantity demanded of restaurant meals increases from 10 to 12. Restaurant meals are considered ________ for Kate.
a) normal good
b) luxury good
c) inferior good
d) inelastic good
2. Price elasticity of demand measures ________.
a) the change in demand due to a change in the good's own price
b) the change in quantity demanded to a change in the good's own price
c) the percentage change in quantity demanded due to a percentage change in the good's own price
d) the slope of the demand function
Homework Answers
1.Normal good because demand rises with increase in income.
Answer-A
2.Price elasticity of demand measures the sensitivity of quantity demanded to a change in price .
Answer-C
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1. Kate's income is increased by 25%. Her quantity
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