Answer:1) how responsive quantity demanded is to changes in income--A 2) income elasticity of demand for butter is 0.11. That means butter is a luxury good---A
Explanation:
1) Income elasticity of demand refers to the responsiveness of the quantity demanded for a certain good to a change in income of consumers who purchase this good.The higher the income elasticity of a good, the greater the consumers' response in their purchasing lifestyle.
The formula for Income elasticity of demands given by
The percent change in quantity demanded divided by the percent change in income.
2) Income elasticity of demand, helps us to identify if a particular good represents a necessity or a luxury.
-when the income elasticity for a good is less than 1(ie from 0-1) we say that the good is a normal good. these goods are also called necessity goods and consumers will purchase them irrespective of the changes in their income eg water, electricity
- when the income elasticity of a good is greater than 1 , we say that the good is a luxury good. eg butter
- An inferior good is one with a negative income elasticity which means rising incomes will lead to a drop in demand.
Answer:
customer must deposit $8000
Explanation:
given data
purchases bonds = $100,000
margin = 40%
solution
As we know minimum maintenance requirement set by Financial Industry Regulatory Authority is the great than 7% of face amount or 20% of the market value
and margins is minimums set by exchange
so bond is purchased at 40% is
bond purchase = 40% × $100,000 = $40000
and 20% of $40,000 is = $8,000
and 7 % of $100,000 is = $7,000
so greater amount is $8,000
so customer must deposit $8000
Answer:
creates a shortage
Explanation:
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Because price is set below equilibrium price, demand would outstrip supply and this would lead to a shortage
Effects of a price ceiling
1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus
Answer:
c. is very profitable for the dealer
Explanation:
"Gap'' Insurance pays off the loan balance if the insurance payment is insufficient also it is profitable for dealer as well. Sometime the main insurance claim cannot fufill the loss so those that cannot be fullfill by main insurance are manage by gap insurance.
