Question

QUESTION 35 We would expect the income elasticity of demand for steak to be positive, and that for hamburger to be negative. True False QUESTION 36 What will happen to the equilibrium quantity and price of salmon in a competitive market when there is an equal decrease in demand and supply? Equilibrium quantity and price will both decrease. Equilibrium quantity will decrease and equilibrium price will stay the same. Equilibrium quantity and price will both increase. Equilibrium quantity will stay the same and equilibrium price will increase. QUESTION 37 When a consumer has maximized total utility, he or she cannot increase total utility by reallocating expenditures among different products. True False

Answer 1

Answer 1 - it is a true

• If the income elasticity is positive, it means that an increase in income will cause an increase in demand.
• For example,Last year, Joan bought 50 pounds of hamburger when her household's income was $40,000. This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger. All else constant, Joan's income elasticity of demand for hamburger is negative, so Joan considers hamburger to be an inferior good.

Answer2- B is the right answer

• Equilibrium quantity will decrease and equilibrium price will stay the same will happen to the equilibrium quantity and price of salmon in a competitive market when there is an equal decrease in demand and supply.
• If both demand and supply curves shift to the right, then equilibrium quantity increase and equilibrium price may increase, decrease, or stay the same.

• If both demand and supply curves shift to the left, then equilibrium quantity decreases and equilibrium price may increase, decrease, or stay the same.

Answer 3 it is true

True, When a consumer is maximizing total utility, he or she cannot increase total utility by reallocating expenditures among different products.

• If total utility is increasing, then marginal utility is positive and may be either increasing or decreasing.