9) When Fred s income was $100 per week, 10 units of good X were demanded. Now his income is
$150 per week and 12 units of good X are demanded. Using the percentage change formula, the
income elasticity of demand for good X equals ________.
A) 0.45 B) 0.40 C) 2.20 D) 2.50
10) Income elasticity of demand reflects
A) the change in total quantity demanded divided by the total change in income.
B) the responsiveness of the quantity demanded to changes in income, adjusting its relative
price so real income does not change.
C) the responsiveness of income of producers to a change in quantity sold of the good.
D) the responsiveness of demand to changes in income.
11) When Mary earned $3,200 per month, she bought 2 concert tickets each month. Now her
monthly income is $5,600, and the number of concert tickets she purchases has risen to 3 per
month. Mary s income elasticity of demand for concert tickets equals ________ and the tickets
are a(n) ________ good for Mary.
A) 1.36; normal B) 0.21; inferior
C) 0.21; complementary D) 0.73; normal
12) The income elasticity of demand is
A) the percentage change in demand divided by the percentage change in income.
B) the change in income divided by the percentage change in price.
C) the change in quantity demanded divided by the change in price.
D) the percentage change in income divided by the percentage change in quantity demanded.
13) A measure of the responsiveness of demand to changes in income, all other things being
constant, is
A) income elasticity of demand. B) price income elasticity of demand.
C) price elasticity of demand. D) cross price elasticity of demand.