Asked by
Michael Palandri
on Nov 04, 2024
Verified
If income increases by 10% and, in response, the quantity of housing demanded increases by 7%, then the income elasticity of demand for housing is
A) -1.
B) -0.7.
C) 0.7.
D) 1.43.
Income Elasticity
An indicator of the degree to which demand for a product or service shifts following a variation in consumer income.
Housing
The provision of accommodation, typically through buildings or structures where individuals or families live.
Income Increase
A rise in the amount of money earned by an individual or collected by an organization, often measured on a monthly or yearly basis.
- Understand the effects of variations in income on the elasticity of demand for various goods.
- Understand the importance of income elasticity of demand across different products.
Verified Answer
AR
Learning Objectives
- Understand the effects of variations in income on the elasticity of demand for various goods.
- Understand the importance of income elasticity of demand across different products.