Homework Answers
Ans. D) A negative cross price elasticity for two goods A and B would arise if A and B were demand complements. - Complementary goods have negative cross elasticity.
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2. Which of the following statements is true? A) The price elasticity of demand is positive...
1. Suppose that when the price of a good is s15, the quantity demanded is 4o...
1. Suppose that when the price of a good is s15, the quantity demanded is 4o units, and when the price falls to s6, the quantity increases to 6o units. The price elasticity of demand near a price of s6 and a quantity of 60 can be calculated as: A) -5/6 C)-2/9 B)-2 D) -9/2 2. Which of the following statements is true? A) The price elasticity of demand is positive when there is an inverse relationship betweern price and...
If the income elasticity of demand for a good is negative, then the good must be...
If the income elasticity of demand for a good is negative, then the good must be an inferior good. True False Question 2 The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises. True False Question 3 A price ceiling set above the equilibrium price is not binding. True False Question 4 The cross-price elasticity of garlic salt...
1.) Suppose the price elasticity of demand for bread is 2.00. If the price of bread...
1.) Suppose the price elasticity of demand for bread is 2.00. If the price of bread falls by 10%, the quantity demanded will increase by: a. 2 percent and total expenditures on bread will rise. b. 2 percent and total expenditures on bread will fall. c. 20 percent and total expenditures on bread will rise. d. 20 percent and total expenditures on bread will fall. e. 20 percent and total expenditures on bread will be unchanged. 2.) Suppose that a...
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...
Suppose that the income elasticity of demand for good X is positive but less than 1. Other things being equal, which of...
Suppose that the income elasticity of demand for good X is positive but less than 1. Other things being equal, which of the following statements is incorrect? O A. Good X is a normal good. OB. The quantity demanded of good X decreases as a consumer's income declines. OC. A consumer buys more X as income rises, but the share of income spent on good X falls. OD. A consumer buys more X as income rises and the share of...
please help with these 10 questions. Thank you 2. If the price elasticity of demand is...
please help with these 10 questions. Thank you
2. If the price elasticity of demand is 10, then for every 1% Increase in price, there is a: 1% decrease in quantity demanded. O 1% increase in quantity demanded. O 10% increase in quantity demanded. 10 / decrease in quantity demanded. sales of reels because the two goods are 3. If the cross elasticity of demand between fly rods and reels is -0.8, a decrease in the price of rods would...
8. The income elasticity of demand is a measure of the responsiveness of the 0 A....
8. The income elasticity of demand is a measure of the responsiveness of the 0 A. quantity of a good demanded to changes in income. O B. quantity of a good demanded to changes in another good's price. C. 0 D. quantity of a good demanded to changes in its price. consumer's income to a change in the price of the goods he or she consumes. 9, Bus rides and canned soup are inferior goods, so the elasticity of demand...
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...
Question 2: For each of the following statements, state the relevant elasticity (e.g. price elasticity of...
Question 2: For each of the following statements, state the relevant elasticity (e.g. price elasticity of demand, price elasticity of supply, income elasticity of demand, cross-price elasticity of demand) and state what its absolute value should be (negative, positive or zero?): Example: Question: The demand for coffee increases when the price of tea increases Answer: the cross-price elasticity of demand for coffee with respect to changes in tea prices is positive a. The demand for cars increases during times of...
4. (a) A product has a price elasticity of demand equal to -2. If price increases...
4. (a) A product has a price elasticity of demand equal to -2. If price increases by 6 percent, what will be the decrease in quantity demanded? (b) Is this product most likely a luxury or necessity, and why? (c) Another product has an income elasticity of 0.8. If income rises by 8 percent, what will be the increase in demand? (d) Two products have a cross price elasticity of -0.4. Are these product substitutes or complements. (e) Yet another...
1. Suppose that when the price of a good is s15, the quantity demanded is 4o units, and when the price falls to s6, the quantity increases to 6o units. The price elasticity of demand near a price of s6 and a quantity of 60 can be calculated as: A) -5/6 C)-2/9 B)-2 D) -9/2 2. Which of the following statements is true? A) The price elasticity of demand is positive when there is an inverse relationship betweern price and...
Suppose that the income elasticity of demand for good X is positive but less than 1. Other things being equal, which of the following statements is incorrect? O A. Good X is a normal good. OB. The quantity demanded of good X decreases as a consumer's income declines. OC. A consumer buys more X as income rises, but the share of income spent on good X falls. OD. A consumer buys more X as income rises and the share of...
please help with these 10 questions. Thank you
2. If the price elasticity of demand is 10, then for every 1% Increase in price, there is a: 1% decrease in quantity demanded. O 1% increase in quantity demanded. O 10% increase in quantity demanded. 10 / decrease in quantity demanded. sales of reels because the two goods are 3. If the cross elasticity of demand between fly rods and reels is -0.8, a decrease in the price of rods would...
8. The income elasticity of demand is a measure of the responsiveness of the 0 A. quantity of a good demanded to changes in income. O B. quantity of a good demanded to changes in another good's price. C. 0 D. quantity of a good demanded to changes in its price. consumer's income to a change in the price of the goods he or she consumes. 9, Bus rides and canned soup are inferior goods, so the elasticity of demand...
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...
Question 2: For each of the following statements, state the relevant elasticity (e.g. price elasticity of demand, price elasticity of supply, income elasticity of demand, cross-price elasticity of demand) and state what its absolute value should be (negative, positive or zero?): Example: Question: The demand for coffee increases when the price of tea increases Answer: the cross-price elasticity of demand for coffee with respect to changes in tea prices is positive a. The demand for cars increases during times of...
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