If the income elasticity for chocolate chip cookies

Topic: Income Elasticity of Demand
Skill: Analytical
169) About six months ago, Pat lost the job as vice
president of a local bank. Since losing the job, Pat
still has the Sunday newspaper delivered every
week. For Pat, the Sunday newspaper is
normal good and ____ for an inferior good.
Answer: A
Topic: Income Elasticity of Demand
Skill: Analytical*
170) Peter’s monthly income increases from $1,500 to
$1,600. As a result, he increases the number of
CDs he buys per month from 2 to 3. Peter’s de-
mand for CDs is
B) price inelastic.
C) income elastic.
D) income inelastic.
Answer: C
Topic: Income Elasticity of Demand
Skill: Analytical*
171) Paul’s monthly income decreased from $2,500 to
$2,300. As a result, he decreased the number of
DVDs he rents per month from 5 to 4. Paul’s
demand for DVD rentals is
Answer: B
168) If the income elasticity for chocolate chip cookies
is 1.84, then chocolate chip cookies are
A) a normal good and income inelastic.
B) a normal good and income elastic.
C) an inferior good and income inelastic.
D) an inferior good and income elastic.
B) price inelastic.
C) income elastic.
Topic: Income Elasticity of Demand
Skill: Recognition
172) The income elasticity of demand is ____ for a

1 3 8 C H A P T E R 4
Topic: Income Elasticity of Demand
Skill: Analytical
173) Last year, Jack ‘s income was $15,000 and he
bought 50 pounds of potato chips. This year his
income is $18,000 and he buys 55 pounds of po-
tato chips. Therefore, Jack’s
A) income elasticity of demand for potato chips is
0.52.
B) price elasticity of demand for potato chips is
0.52.
C) income elasticity of demand for potato chips is
1.66.
D) price elasticity of demand for potato chips is
1.66.
Answer: A
Topic: Income Elasticity of Demand
Skill: Conceptual
174) The income elasticity of demand is defined as the
percentage change in
Answer: D
Topic: Income Elasticity of Demand
Skill: Analytical