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Income elasticity

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If the income elasticity coefficient equals 1, the proportion of a consumer's income spent on a given product after a change in income will be _________ the proportion of income spent on that product prior to the income change.
greater than
less than
equal to
either greater than or equal to

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Income elasticity is overviewed in this solution.

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Income elasticity = percentage change in consumption / percentage change in income
When elasticity = 1, ...

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