Question

true or false: ​If a product constitutes a large portion of a consumer's income, demand will...

true or false: ​If a product constitutes a large portion of a consumer's income, demand will be more inelastic.

Homework Answers

Answer #1

This is a FALSE STATEMENT.

When the consumer spent a larger percentage of his income on good, the demand for that good will be more elastic.

Since the consumer is spending a larger proportion on a product, he will be more sensitive to a change in the price of that product. A small change in the price of those goods will lead to a larger percentage change in the quantity demanded.

Those demand for those goods which takes a small percentage of our income doesn’t changes more to the change in the price, having inelastic demand.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
As the percentage of the consumer's income accounted for by a particular good decreases, demand for...
As the percentage of the consumer's income accounted for by a particular good decreases, demand for the good will: * A) tend to become more price elastic. B) tend to become more price inelastic. C) tend to become closer to unit elastic. D) tend toward being perfectly elastic.
When a consumer’s income rises, they will consume more of all goods. True or False? If...
When a consumer’s income rises, they will consume more of all goods. True or False? If capital is fixed there is a certain point where adding more labor is counterproductive true or false ? The firm supply curve shows the profit-maximizing level of output associated with different product prices. True or False? The way we get from individual consumer demand curves to market demand curves is pretty much the same way we get from individual firm supply curves to market...
An exogenous drop in interest rates,constitutes a positive aggegate demand shock because lower interest rates means...
An exogenous drop in interest rates,constitutes a positive aggegate demand shock because lower interest rates means more loans and credit spending,which boost Consumption exepnditure True or False
Which of the following is false? A. Products with close substitutes have elastic demand. B. Demand...
Which of the following is false? A. Products with close substitutes have elastic demand. B. Demand for a specific brand of a product is less elastic than industry aggregate demand for the product. C. High priced products requiring a large portion of consumers’ incomes have less elastic demand. D. In the long run, demand curves become more elastic
For questions (1) through (5) write the number of each question and TRUE (if the statement...
For questions (1) through (5) write the number of each question and TRUE (if the statement is true) or FALSE (if the statement is false) by each number. (1) If there is excess DEMAND, the price will FALL in a free market. (2) A change in PRICE will SHIFT the consumer's demand curve. (3) If price is BELOW the equilibrium price there will be excess DEMAND. (4) The INCOME effect is NOT caused by a change in price. (5) If...
Which of the following is true of price elasticity of demand? a. The elasticity of demand...
Which of the following is true of price elasticity of demand? a. The elasticity of demand is inversely proportional to the number of competitors offering a particular product. b. Price elasticity tends to be greater in countries with low income levels. c. Demand is said to be elastic is only defined by the competitive conditions in a country. d. The price elasticity of demand is only defined by the competitive conditions in a country. e. Demand is said to be...
if Income increases and the demand for a product increases then we can conclude that A....
if Income increases and the demand for a product increases then we can conclude that A. prodct is an inferior product B. product is a normil product C. marginal unitity of the product will increase D. produch has an inelastic demand E. product has an elastic demand
Answer using: True or False, and Why? 2. If the price of a product decreases, then...
Answer using: True or False, and Why? 2. If the price of a product decreases, then the demand curve shifts to the right. 3. When economists say the demand for a product has increased, they mean that consumers are willing and able to purchase more at any given price. 4. If the demand curve for product J shifts to the left as the price of product K decreases, then J and K are substitute goods.
True and False question: (I will be grateful if you could give a short explanation of...
True and False question: (I will be grateful if you could give a short explanation of the answer to each question.) In an English auction, the equilibrium price of a piece of art is determined by the highest bid. True               (b) False The only reason people go to the opera is to appreciate the show. True               (b) False Perfect competition is a good model to explain the market for art. True             (b) False Works produced by an artist will lose...
True/False 1.Income Effect shows that a higher level of income causes the demand for money at...
True/False 1.Income Effect shows that a higher level of income causes the demand for money at each interest rate to increase and the demand curve to shift to the left T/F 2.Interest payments on municipal bonds are not exempt from federal income taxes T/F 3.Bonds with identical risk, liquidity, and tax characteristics may have different interest rates because the time remaining to maturity is different T/F
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT