Homework Answers
Ans. d. -.4; an inferior good
The income elasticity of demand = % change in quantity demand for bikes/% change in income
= ( - 4%)/10%
= - 0.4
Hence, the income elasticity of demand is (- 0.4) and it is negative, therefore, bicycles must be an inferior good because income of the consumers and demand for inferior goods have a negative relationship.
Add Answer to:
Suppose consumer incomes rise by 10% in your country. Ceteris paribus, as a direct result, quantity...
A 10% decrease in consumer incomes leads to a 20% decrease in the quantity demanded of...
A 10% decrease in consumer incomes leads to a 20% decrease in the quantity demanded of Good D. The income elasticity of this good is: This good can best be described as: A.) inferior and luxury B.)inferior and necessity C.)Normal and necessity D.)Normal and luxury
Assume that bologna is an inferior good. Suppose consumer incomes are declining due to the recession, and,...
Assume that bologna is an inferior good. Suppose consumer incomes are declining due to the recession, and, at the same time, firms are seeing an increase in the production costs of producing this lunch meat. Draw a supply and demand diagram. Also, write WHY the curve (or curves) is (are) shifting based on the shift factors for demand and supply. What is happening to the equilibrium price and quantity? Remember the concept of ceteris paribus.
11. Cameras and film are complements. If the price of cameras falls, ceteris paribus, a) The...
11. Cameras and film are complements. If the price of cameras falls, ceteris paribus, a) The demand for cameras will increase. b) The quantity of film demanded will fall. c) The demand for film will rise d) The demand for film will fall. 12. When one moves along a demand curve, which of the following includes only variables that are assumed to be constant? Households' income, the price of the good, and tastes. a) b) Tastes, the number of buyers...
3. Which of the following would decrease the quantity supplied of smartphones, ceteris paribus? An increase...
3. Which of the following would decrease the quantity supplied of smartphones, ceteris paribus? An increase in the price of HDTVs, assuming that smartphones and HDTVs are substitutes in production. A decrease in the number of smartphone producers. A decrease in consumer income, assuming that smartphones are normal goods. An increase in the wages of smartphone production workers. All of the changes listed for this question will decrease the quantity supplied of smartphones. 4. According to the law of supply,...
7. If the price of orange juice rises 10%, and as a result the quantity demanded...
7. If the price of orange juice rises 10%, and as a result the quantity demanded falls by 8%, the price elasticity of demand for orange juice is O A. inelastic. OB. -1.25 O c. Both A and B above. OD. Neither A nor B above. 18. If the price of orange juice rises 10% and as a result the quantity demanded falls by B%, the price elasticity of demand for orange juice is O A. - 10.0. OB. -0.80....
1) A U.S. Department of Agriculture study of the demand for food products showed that the...
1) A U.S. Department of Agriculture study of the demand for food products showed that the price elasticity of demand for potatoes is -0.42; the elasticity of demand for potatoes with respect to the price of tomatoes is 0.09; and the income elasticity of demand for potatoes is 0.10. a. Based on these figures, is the demand for potatoes elastic or inelastic? How can you tell? Explain. b. Based on these figures, are potatoes a normal good or an inferior...
Suppose initial price and quantity are
Suppose initial price and quantity are 161 P and 281 Q and new price and quantity are 142 P and 422 Q . (i). Calculate price elasticity of demand. (ii). If price decreases further what will happen to total revenue? (iii). If we want to increase sales by 30 percent how much should price be decreased (in percentage)? (iv). If we decrease price by 10 percent how will it increase quantity demanded (in percentage)? (b). Suppose price of pizza is $10 and people buy 8...
22. Consider two imaginary goods, widgets and gadgets. The cross-price elasticity of demand for widgets with respec...
22. Consider two imaginary goods, widgets and gadgets. The cross-price elasticity of demand for widgets with respect to the price of gadgets is +0.5. This tells us that widgets and gadgets are a. Compliments b. Substitutes c. Unrelated in consumption For this condition to hold, 23. Assume that the market demand for widgets is perfectly inelastic. a. There must be no good substitute for widgets, and widgets must be a normal good. b. There must be no good substitute for...
From the list on your right select the letter that contains the word phrase, name, etc...
From the list on your right select the letter that contains the word phrase, name, etc that best matches the word, phrase, name, ele listed on the A The Law of Supply B. Equilibrium C. An example of price floor The total amount of goods and services consumers are willing and able to purchase at a given price. D. Substitutes Other things remaining the same ar ather things being equal E. Demand Positive or direct relationship between price and quantity...
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...
11. Cameras and film are complements. If the price of cameras falls, ceteris paribus, a) The demand for cameras will increase. b) The quantity of film demanded will fall. c) The demand for film will rise d) The demand for film will fall. 12. When one moves along a demand curve, which of the following includes only variables that are assumed to be constant? Households' income, the price of the good, and tastes. a) b) Tastes, the number of buyers...
7. If the price of orange juice rises 10%, and as a result the quantity demanded falls by 8%, the price elasticity of demand for orange juice is O A. inelastic. OB. -1.25 O c. Both A and B above. OD. Neither A nor B above. 18. If the price of orange juice rises 10% and as a result the quantity demanded falls by B%, the price elasticity of demand for orange juice is O A. - 10.0. OB. -0.80....
22. Consider two imaginary goods, widgets and gadgets. The cross-price elasticity of demand for widgets with respect to the price of gadgets is +0.5. This tells us that widgets and gadgets are a. Compliments b. Substitutes c. Unrelated in consumption For this condition to hold, 23. Assume that the market demand for widgets is perfectly inelastic. a. There must be no good substitute for widgets, and widgets must be a normal good. b. There must be no good substitute for...
From the list on your right select the letter that contains the word phrase, name, etc that best matches the word, phrase, name, ele listed on the A The Law of Supply B. Equilibrium C. An example of price floor The total amount of goods and services consumers are willing and able to purchase at a given price. D. Substitutes Other things remaining the same ar ather things being equal E. Demand Positive or direct relationship between price and quantity...
Most questions answered within 3 hours.
-
a) Draw two water molecules.
b) Clearly name and label the type of bond that exists...
asked 52 minutes ago -
C - Language
Write a loop that sets each array element to the sum of itself...
asked 2 hours ago -
(63
#14)
which of the following statments best describes how chamging
the concentration of the substances...
asked 5 hours ago -
In the following reaction, which element is undergoing
oxidation: Na2SO3 + N2O --> N2 + Na2SO4...
asked 6 hours ago -
Which of the following pairs of ions have the same electron
configuration?
I: Br− and Se2−...
asked 8 hours ago -
The Foremost Composite Materials Company is planning a two-day
sales conference for October 19-20. The conference...
asked 9 hours ago -
3) Illustrate the observed pattern of relatedness of organisms
versus adaptations to specific conditions. This means...
asked 9 hours ago -
In winter a lake has a 0.35 m thick ice layer over 1.10 m of
water....
asked 10 hours ago -
Assuming the following has been encrypted with a Vigenere cipher
below, use the method(s) and assumptions...
asked 10 hours ago -
How would I use switch statements to write a program that will
take an input of...
asked 10 hours ago -
Imagine a reaction in which methane gas combusts at a constant
pressure of 1 atm and...
asked 10 hours ago -
Two parallel wires (each 12 m in length) are separated by a
distance of 0.065 m...
asked 10 hours ago