Which of the following statements correctly characterizes the elasticity of demand for food?
a. While food demand is not very responsive to changes in price, increases in income produce big increases in the demand for food.
b. As income increases, the quantity demanded of food decreases.
c. If the price of food falls by 5 percent, quantity demanded will rise by less than 5 percent.
d. People consume the same amount of food regardless of the price of food.
c. If the price of food falls by 5 percent, quantity demanded will rise by less than 5 percent.
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The difference between the price the consumer is willing to pay for a good or service and what he would have to pay for that unit is called: a. the total gains from trading that unit. b. the gain in producer surplus
c. the gain in consumer surplus. d. the total surplus.
The concept of absolute poverty states that anyone who falls too far behind the average income should be considered poor.
Answer the following statement true (T) or false (F)