The income elasticity of demand refers to:
A. a change in income following a change in quantity demanded.
B. the change in income required for quantity demanded to change by 1%.
C. the substitution of one good for another as income changes.
D. the percentage change in quantity demanded resulting from a 1-percent increase in income.
D. the percentage change in quantity demanded resulting from a 1-percent increase in income.
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A price above the equilibrium price will:
A) result in quantity supplied being less than quantity demanded. B) result in a shortage. C) create pressure for price to fall. D) tend to rise over time.
Refer to Figure 4-7 which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded, and quantity exchanged?
What will be an ideal response?