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Suppose the income elasticity of demand for toys is +1.2. This means that Multiple Choice a 5 percent increase in income will increase the purchase

Suppose the income elasticity of demand for toys is +1.2. This means that

Multiple Choice

  • a 5 percent increase in income will increase the purchase of toys by 6 percent.
  • a 5 percent increase in income will increase the purchase of toys by 4.17 percent.
  • a 5 percent increase in income will decrease the purchase of toys by 4.17 percent.
  • toys are an inferior good.

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