April 2010 Q 22 says: A consumer always spends one quarter of his income on travel. What are his price elasticity of dmand for travel and his income elasticity of demand for travek respectively: A 1 and 0.25 B 0 and 0.25 C 1 and 0 D 0 and 1. D is the answer. Can someone explain why? I can't figure out how could i have come to the answer.
This question contains an error and none of the answers are correct. The correct answer is: -1 and 1 This is explained fully in the Subject CT7 ASET. I hope this helps!
