Explain what the slope of the income consumption curve shows about the income elasticity of demand
What will be an ideal response?
A positive slope of the income consumption curve is associated with a positive income elasticity of demand, and a negatively sloped income consumption curve is associated with a negative income elasticity of demand. The income consumption curve represents how consumption changes with an increase in income. An upward sloping income consumption curve represents an increase in consumption as income rises, as does a positive income elasticity.
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What will be an ideal response?
The term "quantity demanded" refers to the
A) total amount of a good that is actually purchased during a given period of time. B) total amount of a good that people wish to buy, regardless of price. C) total amount of a good that purchasers wish to purchase at a given price during a given period of time. D) product of advertising, and is unrelated to price. E) entire relationship between desired purchases and possible prices.