Answer:
The answer to this question is b. Yours will be positive and your roommate's would be negative.
Explanation:
Income elasticity of demand is the degree of responsiveness of demand to changes in income. In other words, it measures how changes in income of consumers will affect the quantity of commodities demanded by such consumers.
An income elasticity of demand can be positive or negative.
It is positive, when an increase in income leads to an increase in the quantity demanded by the customer. However it is referred to as negative when an increase in income leads to decrease in the quantity demanded by the consumer.
In the question above, it can be seen that the increase in income of the first person brought about increase in the commodity demanded thereby making his income elasticity of demand positive. one the other hand, the increase in the income of his roommate, brought about decrease in his demand which translate to the fact that his income elasticity of demand would be negative.
Hence the answer given.
Answer:
Explanation:price of the commodity
price of related goods
income if the consumer
taste and preference
exceptation of change of price
Answer:
Steve
Craig
48
32
42 hours
Explanation:
A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.
Opportunity cost of Steve in catching pineapples = 4/2 = 2
Opportunity cost of Craig in catching pineapples = 2/2 = 1
Craig has a lower opportunity cost in picking pineapple and he has a comparative advantage
A person has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other people
Steve can catch 4 fish and Craig can catch 2 fish. Steve catches more fish and has an absolute advantage
If they both caught only fish, Steve would catch 4 fishes in an hour and Craig would pick 2 pineapples in an hour
In 8 hours = (4 x 8) + (2 x 8) = 48
If they both worked 8 hours and wanted to collect exactly four baskets of pineapples per day, they would collect 4 pineapples in 1 hour
That leaves 7 hours
(4 x 7) + (2 x 7) = 42