Income elasticity of demand

gas tax at federal level to rise along the prices of infrastructure materials is a bad idea because the tax will not generate enough revenue to maintain states transportation. “Increasing gas prices with higher tax rate will decrease the amount of income earned after the tax is deducted. “ Nineteen of these states have waited a decade or more for an update in federal gas tax, since the time they increased their gas tax. Among these state, six of them as well as District of Columbia have abandoned

If the elasticity of demand is greater than one, then the demand is elastic, and if it is less than one the demand is inelastic. If demand is equal to one then the demand is unit elastic. Therefore, inelasticity implies that the product is a necessity to the consumer. With this in mind, a company must make the appropriate decisions based

leading, lagging, and coincident indicators. 1. Lagging indicators, like the unemployment rate and corporate profits, are of little help in forecasting since they change only after the economy begins to shift. 2. Coincident indicators, like personal income and industrial production that move simultaneously with the business cycle are equally unhelpful in forecasting the future. 3. Leading indicators that move in advance of changes in the business cycle are more helpful. Housing starts usually start

Question 1 1 out of 1 points According to the graph below, if a country is currently producing at point X, the opportunity cost of producing another consumer good is   Selected Answer:   20 capital goods Answers:   20 capital goods More than 20 capital goods Fewer than 20 capital goods 20 consumer goods Fewer than 20 consumer goods Question 2 1 out of 1 points The basic economic problem of all countries is the existence of Selected

economics the demand of any good is “the amount of the good that buyers are willing and able to purchase” (Mankiw, 2012). When considering the demand of smartphones there are several determining factors that correspond with it. One of the key factors is income. As smartphones are normal, or even luxury goods, then there is a positive correlation between consumers’ income and the demand for the product. In other words, when consumers’ income rises the demand increases; when income falls, the same

Have you ever wondered how often a black male visits the barber? Before 2007 the males in my family visited the barber every two weeks. At that time, it was $10 for a cut hair and a shape up without tip. However, during the recession (2007- 2009) was a very uneasy time where job security was uncertain so many individuals were trying to save or cut cost and so was my family. Barber visits gradually decreased from twice a month to once a month to self-shave and barber visits every 5 to 6 weeks. Initially

MN5118 / MN5118R UNIVERSITY OF LONDON MSc EXAMINATION 2011 For Internal Students of Royal Holloway DO NOT TURN OVER UNTIL TOLD TO BEGIN MN5118 : INTERNATIONAL BUSINESS ECONOMICS MN5118R : INTERNATIONAL BUSINESS ECONOMICS - PAPER FOR RESIT CANDIDATES PAPER A Time Allowed: THREE hours Answer THREE questions No credit will be given for attempting any further questions. This exam paper has been made available in electronic form strictly for the educational benefit of current Royal

product. The relationship between supply and demand is a complex one. When supply of a good/service is high the prices will decrease, but this can lead to a rise in the demand for the product. When demand is high however, more goods are being sold and the supply starts to get low causing higher prices, the demand will decrease at that higher price and more supply will be needed. Producers and business owners should strive to reach a point of equal supply and demand, also known as equilibrium. When equilibrium

In the Middle East and North Africa, less than half of the adults have an account at an established financial organization compared to those in high-income countries. In order for adults in these developing countries to pay for unanticipated costs, including medical care and payments for school, economists would encourage them to save more; considering this would increase investment, and economic progress. However, saving has proven to be an obstacle since there is an economic rendition of myopia

reducing the demand of the product. This diagram shows that with a higher starting point the equilibrium point was reached sooner and therefore eased the supply problem that the initial product launch had. c) Price equilibrium is found where supply and demand are equal. This is the point where both sellers and buyers are happy with the price and quantity (B.Bisardi). For example in the electronic market in 2007, the entertainment company Nintendo was struggling to keep up demand with the sales