Homework Answers
Looking at the aggregate country level data on healthcare costs and income ,one can conclude healthcare is a normal good, there is a direct relationship between income and demand for healthcare. Hence, option(D) i.e both (b) and (c) are correct.
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QUESTION 15 Looking at the aggregate country-level data on healthcare costs and income, one can conclude...
Suppose consumer incomes rise by 10% in your country. Ceteris paribus, as a direct result, quantity...
Suppose consumer incomes rise by 10% in your country. Ceteris paribus, as a direct result, quantity demanded of bikes falls by 4%. Income elasticity of demand must be and bicycles must be (a normal good / an inferior good) in your country. Select one: a. 4; a normal good b. 2.5 ; a normal good c. -2.5; an inferior good o d. -.4; an inferior good
If a product's income elasticity of demand is -1.7, then we can conclude that Select one:...
If a product's income elasticity of demand is -1.7, then we can conclude that Select one: ut of a. a decrease in income will lead to an increase in demand for the product. b. an increase in income will lead to an increase in demand for the product. c. the product is a luxury good. d. the product is a normal good. e, the product is certainly a necessity
When the income elasticity of demand for a good is negative, one can correctly conclude that:...
When the income elasticity of demand for a good is negative, one can correctly conclude that: total revenue will decrease when the price increases. the good is a substitute. the good is a complement. the good is a normal good. the good is an inferior good. As the price is raised along a straight-line demand curve, the demand curve becomes more elastic. True False Income elasticity of demand is expected to be _____. relatively high for necessities relatively low for...
Question 4 1 pts Aresearcher is looking at the relationship between income and happiness. She collects...
Question 4 1 pts Aresearcher is looking at the relationship between income and happiness. She collects data from a random sample of 2,500 American citizens. She analyzes the data and calculates a correlation coefficient of 0.61. What can she conclude? There is a weak, negative relationship between income and happiness Having a higher income causes people to be happy Happy people will always make more money due to their positive outlook Only about 37% of the variation in happiness can...
QUESTION 10 The price elasticity of demand for gasoline is -0.25. If we expect the price...
QUESTION 10 The price elasticity of demand for gasoline is -0.25. If we expect the price of gasoline to increase by 8 percent, what is the expected change in the quantity of gasoline demanded? A. Quantity declines by 2 percent B. Quantity declines by 8 percent C. Quantity increases by 2 percent D. Quantity declines by 4 percent QUESTION 11 The income elasticity of demand for bananas is -0.1. Is this good normal or inferior? A. Normal B. Neither normal...
1. For _____ goods, income elasticity is positive. Instructions: You may select more than one answer....
1. For _____ goods, income elasticity is positive. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. a. normal b. necessity c. luxury d. inferior 2. If a good has an income elasticity of 1.83, then it: a. probably has a lot of close substitutes available. b. is an inferior good, and a necessity. c. is a normal good, and a...
Data collected from the economy of Pokerville reveals that a 15% decrease in income leads to the following changes:
Data collected from the economy of Pokerville reveals that a 15% decrease in income leads to the following changes: A 9% increase in the quantity of clubs demanded . A 17% decrease in the quantity of horses demanded . A 29% decrease in the quantity of aces demanded Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on its income elasticity, indicate whether each good is a normal...
1. Which of the following is not a property of the aggregate demand curve? It shows...
1. Which of the following is not a property of the aggregate demand curve? It shows the relationship between the overall price level and level consumption. It shows the price level on the vertical axis and output on the horizontal axis. The aggregate demand curve slopes downward. It shows the relationship between the overall price level and the level of total demand. 2. When the price level increases people: feel more wealthy. have the same real value of assets, regardless...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Od 200 - 2Pa 4.51 + 3.0 Py. where Pa Price of commodity "A" 1 = Consumer incomes Py Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) is commodity "A" a normal or an inferior good? How did you know? (c) Comment...
4. Suppose that the aggregate level of spending on consumer goods in an economy can be...
4. Suppose that the aggregate level of spending on consumer goods in an economy can be represented by the following equation: C = a + b* (Y-T) = 500 + 0.7*(Y-T) where 0.7 is the marginal propensity to consume (i.e. how much of each new dollar of income is spent on consumer goods) or “b”, Y is national income (or GDP) and T is the tax burden on consumers. (29 points total) a) Total nominal income is $200 billion while...
Suppose consumer incomes rise by 10% in your country. Ceteris paribus, as a direct result, quantity demanded of bikes falls by 4%. Income elasticity of demand must be and bicycles must be (a normal good / an inferior good) in your country. Select one: a. 4; a normal good b. 2.5 ; a normal good c. -2.5; an inferior good o d. -.4; an inferior good
If a product's income elasticity of demand is -1.7, then we can conclude that Select one: ut of a. a decrease in income will lead to an increase in demand for the product. b. an increase in income will lead to an increase in demand for the product. c. the product is a luxury good. d. the product is a normal good. e, the product is certainly a necessity
Question 4 1 pts Aresearcher is looking at the relationship between income and happiness. She collects data from a random sample of 2,500 American citizens. She analyzes the data and calculates a correlation coefficient of 0.61. What can she conclude? There is a weak, negative relationship between income and happiness Having a higher income causes people to be happy Happy people will always make more money due to their positive outlook Only about 37% of the variation in happiness can...
(4) A researcher estimated a demand function for commodity "A" using weekly data collected over a 30-month period. The estimated model is presented below. Od 200 - 2Pa 4.51 + 3.0 Py. where Pa Price of commodity "A" 1 = Consumer incomes Py Price of commodity Y (a)On aggregate, does the behavior of the consumers of this product follow the LAW OF DEMAND? Explain. (b) is commodity "A" a normal or an inferior good? How did you know? (c) Comment...
4. Suppose that the aggregate level of spending on consumer goods in an economy can be represented by the following equation: C = a + b* (Y-T) = 500 + 0.7*(Y-T) where 0.7 is the marginal propensity to consume (i.e. how much of each new dollar of income is spent on consumer goods) or “b”, Y is national income (or GDP) and T is the tax burden on consumers. (29 points total) a) Total nominal income is $200 billion while...
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