The flatter the demand curve through a given point, the a. closer the price elasticity of demand will be to the slope of the curve. b. smaller the price elasticity of demand at that point. c. greater the price elasticity of demand at that point. greater the absolute value of the change in total revenue when there is a movement from that point upward and to the left along the demand curve. QUESTION 2 It is estimated that in Bangledesh the income elasticity of demand for fruits and vegetables is 0.638, while the income elasticity of demand for Tobacco is 1.139. This tells us that a. Tobacco is inferior, but fruits and vegetables are a normal good b. Both Tobacco and Fruits and Vegetables are inferior goods c. Fruits and Vegetables are inferior, but Tobacco is a normal good d. Both Tobacco and Fruits and Vegetables are normal goods QUESTION 3 Suppose that the cross-price elasticity of the demand for beer with respect to the price of wine is +0.30 in Sweeden, but -0.25 in Luxemborg. Which of the following is true: a. Wine is a substitute for beer in Sweeden and Luxemborg b. Wine is a complement for beer in Sweeden and a substitute in Luxemborg c. Wine is a complement for beer in Sweeden and Luxemborg d. Wine is a substitute for beer in Sweeden and a complement in Luxemborg O O
The flatter the demand curve through a given point, the a. closer the price elasticity of demand will be to the slope of the curve. b. smaller the price elasticity of demand at that point. c. greater the price elasticity of demand at that point. greater the absolute value of the change in total revenue when there is a movement from that point upward and to the left along the demand curve. QUESTION 2 It is estimated that in Bangledesh the income elasticity of demand for fruits and vegetables is 0.638, while the income elasticity of demand for Tobacco is 1.139. This tells us that a. Tobacco is inferior, but fruits and vegetables are a normal good b. Both Tobacco and Fruits and Vegetables are inferior goods c. Fruits and Vegetables are inferior, but Tobacco is a normal good d. Both Tobacco and Fruits and Vegetables are normal goods QUESTION 3 Suppose that the cross-price elasticity of the demand for beer with respect to the price of wine is +0.30 in Sweeden, but -0.25 in Luxemborg. Which of the following is true: a. Wine is a substitute for beer in Sweeden and Luxemborg b. Wine is a complement for beer in Sweeden and a substitute in Luxemborg c. Wine is a complement for beer in Sweeden and Luxemborg d. Wine is a substitute for beer in Sweeden and a complement in Luxemborg O O
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The flatter the demand curve through a given point, the
a. closer the price elasticity of demand will be to the slope of the curve.
b. smaller the price elasticity of demand at that point.
c. greater the price elasticity of demand at that point.
greater the absolute value of the change in total revenue when there is a movement from that point upward and to the left along the
demand curve.
QUESTION 2
It is estimated that in Bangledesh the income elasticity of demand for fruits and vegetables is 0.638, while the income elasticity of demand
for Tobacco is 1.139. This tells us that
a. Tobacco is inferior, but fruits and vegetables are a normal good
b. Both Tobacco and Fruits and Vegetables are inferior goods
c. Fruits and Vegetables are inferior, but Tobacco is a normal good
d. Both Tobacco and Fruits and Vegetables are normal goods
QUESTION 3
Suppose that the cross-price elasticity of the demand for beer with respect to the price of wine is +0.30 in Sweeden, but -0.25 in
Luxemborg. Which of the following is true:
a. Wine is a substitute for beer in Sweeden and Luxemborg
b. Wine is a complement for beer in Sweeden and a substitute in Luxemborg
c. Wine is a complement for beer in Sweeden and Luxemborg
d. Wine is a substitute for beer in Sweeden and a complement in Luxemborg
O O
Transcribed Image Text:QUESTION 4
Suppose the elasticity of demand for watches is -0.60. If the price rises by 12% how much does the quantity demand change by?
a. Quantity demanded falls by 3.6%
b. Quantity demanded falls by 7.2%
c. Quantity demanded falls by 12%
d. Quantity demanded falls by 20%
QUESTION 5
Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of
demand for the good is
a. positive and therefore the good is a normal good.
b. positive and therefore the good is an inferior good.
c. negative and therefore the good is an inferior good.
d. negative and therefore the good is a normal good.
QUESTION 6
Suppose the cross-price elasticity of demand between hot dogs and mustard is -2.00. This implies that a 20 percent increase in the price of
hot dogs will cause the quantity of mustard purchased to
a. rise by 40 percent.
b. rise by 200 percent.
c. fall by 200 percent.
d. fall by 40 percent.
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