You are the manager of a supermarket, and you know that the income elasticity of peanut butter is exactly −0.5. Due to the economic recession, you expect incomes to increase by 10 percent next year. How should you adjust your purchase of peanut butter?
Buy 5 percent more peanut butter.
Buy 5 percent less peanut butter.
Buy 10 percent more peanut butter.
Buy 10 percent less peanut butter.