Calculate the income elasticity if an 8 percent increase in income leads to a 4 percent increase in quantity demanded for organic produce

Figure 7-7

In Figure 7-7 at 100 units, FC equals

a.
1,000.

b.
1,800.

c.
800.

d.
80.

Maria buys a cup of coffee every day after her economics class. The first cup of coffee always tastes wonderful. The second does not taste quite as good as the first. The third does not taste quite as good as the second. Maria is experiencing

A) irrational behavior. B) the law of diminishing marginal utility. C) the income effect. D) the substitution effect.