Median household income is $50,000 per year. The typical household spe
Median household income is $50,000 per year. The typical household spends about $125 per year on milk, which has an income elasticity of about 0.07. From this information, we can conclude that
A) milk is a luxury.
B) milk is a Giffen good.
C) the income effect from a change in the price of milk is very large.
D) the income effect from a change in the price of milk is very small.
ANSWER
D
Expert paper writers are just a few clicks away
Place an order in 3 easy steps. Takes less than 5 mins.