Last year, Sefton purchased 60 pounds of potatoes to feed his family of five when his household income was $30,000. This year, his household income fell to $20,000 and Sefton purchased 80 pounds of potatoes
All else constant, Sefton's income elasticity of demand for potatoes is
A) positive, so Sefton considers potatoes to be a normal good and a necessity.
B) positive, so Sefton considers potatoes to be an inferior good.
C) negative, so Sefton considers potatoes to be an inferior good.
D) negative, so Sefton considers potatoes to be a normal good.
C
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Two key consequences of asymmetric information are adverse selection and moral hazard. Define each concept, provide one example of each, and explain how the two concepts differ
What will be an ideal response?
According to the text, Ethiopia probably has a low per capita real Gross Domestic Product (GDP) because
A) it has too many resources. B) it has a corrupt government. C) it has a low rate of saving. D) there are too many skilled workers in the country.