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1. The basic formula for price elasticity is
The percentage change in quantity demanded divided by the percentage change in price.
The percentage change in price divided by the percentage change in quantity demanded.
The percentage change in income divided by the percentage change in price.
The change in quantity demanded divided by the change in price.
2. A good is normal if the sign on the income elasticity formula is
Greater than 1.
Negative.
Positive.
Less than 1.
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