Homework Answers
Answer-1 The correct option is inferior; unit income elastic.
A good is inferior its quantity demanded falls with the increase in
income level.
A good is said to have unit income elasticity if proportionate
change in quantity demanded is equal to the proportionate change in
income level.
Thus, the good is inferior and have unit income elasticity.
Answer-2 The correct option is A 1 percent increase in the
price of the product causes demanded quantity to decrease by 3
percent.
Price elasticity of demand measures the percentage change in
quantity demanded due to percentage change in price level. Negative
sign of the elasticity coefficient signifies that there will be an
inverse relationship between price and quantity demanded. Thus, -3
demonstrates that A 1 percent increase in the price of the product
causes demanded quantity to decrease by 3 percent.
Add Answer to:
incomeads to a percent decrease in quantity demanded for a product. This products and on income...
Figure 5-6 Good Z Good Y Good X Price Price Price Demand Quantity Quantity Quantity Refer...
Figure 5-6 Good Z Good Y Good X Price Price Price Demand Quantity Quantity Quantity Refer to Figure 5-6. Identify the two goods which are substitutes. It is not possible to distinguish any relationship among the goods. Good X and Good Y Good Y and Good Z Good X and Good Z If the market for a product is broadly defined, then the expenditure on the good is likely to make up a large share of one's budget there are...
Suppose the value of the price elasticity of demand is -3. What does this mean? A 1 percent increase in the price of th...
Suppose the value of the price elasticity of demand is -3. What does this mean? A 1 percent increase in the price of the product causes demanded quantity to increase by 3 percent. A 3 percent increase in the price of the product causes demanded quantity to decrease by 1 percent. A1 percent increase in the price of the product causes demanded quantity to decrease by 3 percent. A US$1 increase in price causes demanded quantity to fall by 3...
Suppose the value of the price elasticity of demand is -3. What does this mean? O...
Suppose the value of the price elasticity of demand is -3. What does this mean? O A 3 percent increase in the price of the product causes demanded quantity to decrease by 1 percent. O A 1 percent increase in the price of the product causes demanded quantity to increase by 3 percent. O A US$1 increase in price causes demanded quantity to fall by 3 units. O A 1 percent increase in the price of the product causes demanded...
A 5 percent increase in income leads to a 5 percent decrease in quantity demanded for a product. This product is a(n) p...
A 5 percent increase in income leads to a 5 percent decrease in quantity demanded for a product. This product is a(n) product and demand is inferior; income inelastic normal; income inelastic inferior; unit income elastic normal; unit income elastic O O O
If an 8% decrease in price leads to a 4% increase in the quantity demanded of...
If an 8% decrease in price leads to a 4% increase in the quantity demanded of the good, as a result of the price change, the total revenue for this product will: a) decrease b) increase c) not change d) double If a 12% increase in price leads to a 6% decrease in quantity demanded of the good, as a result of the price change, the total revenue for the product will: a) not change b) decrease c) increase d)...
The price elasticity of demand is equal to the percentage change in price divided by the percentage change...
The price elasticity of demand is equal to the percentage change in price divided by the percentage change in quantity demanded the change in quantity demanded divided by the change in price. the value of the slope of the demand curve. the percentage change in quantity demanded divided by the percentage change in price If 20 units are sold at a price of US$50 and 30 units are sold at a price of US$40, what is the absolute value of...
Suppose that a 10 increase in price results in a 50 percent decrease in quantity demanded....
Suppose that a 10 increase in price results in a 50 percent decrease in quantity demanded. What does (the absolute value of) own price elasticity of demand equal? a) 0.5. b) 0.2. c) 5. d) 10.
answer and explain E) 1/3 percent decrease in the quantity demanded for Good X. ........ Supply...
answer and explain
E) 1/3 percent decrease in the quantity demanded for Good X. ........ Supply ..... 8. For the diagram to the right, calculate the value of price elasticity of supply over the price range from $15 to $25. A) 0.8 B) 0.2 C) 0.0533 D) 1.25 E) 5 F) 0.2667 G) 1.333 H) 0.75 I) none of the above 8 quantity 24 9. If at the current price, demand is elastic, then decreasing the price will A) Increase...
Assume that a 4 percent increase in income in the economy produces an 8 percent increase in the quantity demanded of good X
6. Assume that a 4 percent increase in income in the economy produces an 8 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is a. - 0.5 and therefore X is an inferior good. b. +2.0 and therefore X is an inferior good. c. +0.5 and therefore X is a normal good d. +2.0 and therefore X is a normal good 7. Suppose the price elasticity of demand for Reece's peanut butter cups is 1.5 and the...
Refer to Figure 5-1. A perfectly elastic demand curve is shown in Panel D. Panel A. Panel C...
Refer to Figure 5-1. A perfectly elastic demand curve is shown
in
Panel D.
Panel A.
Panel C.
Panel B.
Refer to Figure 5-5. The data in the diagram indicates that
DVDs
are luxury goods.
are both luxury goods and price inelastic goods.
are price inelastic goods.
are both necessities and price inelastic goods.
are necessities.
3-
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d....
Figure 5-6 Good Z Good Y Good X Price Price Price Demand Quantity Quantity Quantity Refer to Figure 5-6. Identify the two goods which are substitutes. It is not possible to distinguish any relationship among the goods. Good X and Good Y Good Y and Good Z Good X and Good Z If the market for a product is broadly defined, then the expenditure on the good is likely to make up a large share of one's budget there are...
Suppose the value of the price elasticity of demand is -3. What does this mean? A 1 percent increase in the price of the product causes demanded quantity to increase by 3 percent. A 3 percent increase in the price of the product causes demanded quantity to decrease by 1 percent. A1 percent increase in the price of the product causes demanded quantity to decrease by 3 percent. A US$1 increase in price causes demanded quantity to fall by 3...
Suppose the value of the price elasticity of demand is -3. What does this mean? O A 3 percent increase in the price of the product causes demanded quantity to decrease by 1 percent. O A 1 percent increase in the price of the product causes demanded quantity to increase by 3 percent. O A US$1 increase in price causes demanded quantity to fall by 3 units. O A 1 percent increase in the price of the product causes demanded...
A 5 percent increase in income leads to a 5 percent decrease in quantity demanded for a product. This product is a(n) product and demand is inferior; income inelastic normal; income inelastic inferior; unit income elastic normal; unit income elastic O O O
The price elasticity of demand is equal to the percentage change in price divided by the percentage change in quantity demanded the change in quantity demanded divided by the change in price. the value of the slope of the demand curve. the percentage change in quantity demanded divided by the percentage change in price If 20 units are sold at a price of US$50 and 30 units are sold at a price of US$40, what is the absolute value of...
answer and explain
E) 1/3 percent decrease in the quantity demanded for Good X. ........ Supply ..... 8. For the diagram to the right, calculate the value of price elasticity of supply over the price range from $15 to $25. A) 0.8 B) 0.2 C) 0.0533 D) 1.25 E) 5 F) 0.2667 G) 1.333 H) 0.75 I) none of the above 8 quantity 24 9. If at the current price, demand is elastic, then decreasing the price will A) Increase...
Refer to Figure 5-1. A perfectly elastic demand curve is shown
in
Panel D.
Panel A.
Panel C.
Panel B.
Refer to Figure 5-5. The data in the diagram indicates that
DVDs
are luxury goods.
are both luxury goods and price inelastic goods.
are price inelastic goods.
are both necessities and price inelastic goods.
are necessities.
3-
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d....
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