Question

Question 5 1.5 pts If demand is linear, the own-price elasticity Becomes more price elastic as we move to higher quantities Becomes less price elastic as we move to higher quantities. Is constant as we move to higher quantities. It can become positive at higher quantities D Question 6 1.5 pts Assume the annual demand for Golden Delicious apples in Connecticut can be represented by the following demand equation: QG-8-2 PG 1.2"PF +0.2 Pop0.3"1 Where QG is the quantity demanded of Golden Delicious Apples, PG is the price of Golden Delicious Apples, PF is the price of Fuji apples, Pop is the population of Connecticut, and I is the average household income in Connecticut. Golden Delicious and Fuji Apples are complements: True False

Answer 1

Question 5. When demand is linear, the elasticity value declines as quantity increases so that for larger quantities demand is less price elastic (2^nd option)

Question 6. False. This is because the coefficient of Fuji apples is positive so that the two goods are substitutes.

Question 7. True because the coefficient of income is positive so that Golden Delicious apples are normal goods

Question 8. False because demand shifts when there is a change in non-price factors. In this case there will be an upward movement along the demand curve.