1. If substitutes are not readily available for a product, it hasA. Inelastic demand.B. Elastic demand....1...C. An income effect.D. A substitution effect.2. A price increase causes a fall in a company's total revenue. This indicates that demand for the company'sproducts isA. SteadyB. ElasticC. InelasticD. Fluctuating3. Which direction will the demand curve shift if consumers' income rise?A. To the rightB. To the leftC. UpwardD. Downward 4. Which of the following terms refers to the amount of money consumers have available to spend on products?A. Inelastic demand.B. Elastic demand.C. An income effect.D. substitution effect.

Answered: 1. If substitutes are not readily…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. If substitutes are not readily available for a product, it has
A. Inelastic demand.
B. Elastic demand.
...
1...
C. An income effect.
D. A substitution effect.
2. A price increase causes a fall in a company's total revenue. This indicates that demand for the company's
products is
A. Steady
B. Elastic
C. Inelastic
D. Fluctuating
3. Which direction will the demand curve shift if consumers' income rise?
A. To the right
B. To the left
C. Upward
D. Downward

4. Which of the following terms refers to the amount of money consumers have available to spend on products?
A. Inelastic demand.
B. Elastic demand.
C. An income effect.
D. substitution effect.

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Availability of substitutes is one of the determining factors of elasticity of demand. So the elasticity of a good with a close substitute and no substitute will be different.

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