The Smith family buys much more macaroni when someone in the family is laid off. This means that the Smiths' ____ is negative
a. demand curve for macaroni
b. income elasticity for macaroni
c. Engel's law
d. income
e. price elasticity of demand for macaroni
b
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A positive externality clearly occurs when
A) a person behaves in the public interest. B) a person's action unintentionally benefits other people. C) a person behaves only with courtesy and social grace. D) a person couldn't care less about anybody else.
Which of the following statements best explains the effects of transfer payments and taxes on aggregate spending? a. Transfer payments and taxes affect aggregate spending directly, just as consumption does
b. Transfer payments and taxes affect aggregate spending indirectly by first changing disposable income and thereby changing consumption. c. Changes in the amount of transfer payments and taxes cancel each other and therefore have no influence on any economic variable. d. Transfer payments and taxes affect disposable income but have no effect on consumption. e. Transfer payments affect disposable income, but taxes do not.