Suppose the income elasticity for transportation is…incorrect statement?

Managerial Economics

Suppose the income elasticity for transportation is 1.8. Which of the following is anincorrect statement?

Transportation is a normal good
Expenditures on transportation grow more rapidly than income grows
Expenditures on transportation will fall less rapidly than income falls
Whenever the income increases by 1%, the expenditure on transportation increases by 1.8%

Note

Suppose the income elasticity for transportation is 1.8.the following is an incorrect statement Expenditures on transportation will fall less rapidly than income falls.

Tags: Quantitative Demand Analysis

Note

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