Asked by
Carina Angel
on Dec 11, 2024
Verified
You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles,
A) yours would be negative and your roommate's would be positive.
B) yours would be positive and your roommate's would be negative.
C) yours would be zero and your roommate's would approach infinity.
D) yours would approach infinity and your roommate's would be zero.
Income Elasticity
A measure of how the demand for a good or service changes in response to changes in the consumer's income.
- Determine the classification of goods into normal, inferior, and luxury types through their income elasticity of demand.
- Distinguish between the effects of variations in income on the consumption of various products.
Verified Answer
DS
Learning Objectives
- Determine the classification of goods into normal, inferior, and luxury types through their income elasticity of demand.
- Distinguish between the effects of variations in income on the consumption of various products.