Which of the following will have an inward parallel shift of the budget constraint? A. Increase in income. B. Increase in the price of one good. C. Decrease in the price of one good. D. Decrease in income. 6. The percentage change in the quantity demanded of one good, divided by the percentage change in price of another good, is called: A. Price elasticity of demand B. Cross elasticity of supply C. Cross elasticity of demand D. Income elasticity of demand
5. Which of the following will have an inward parallel shift of the budget constraint?
A. Increase in income.
B. Increase in the price of one good.
C. Decrease in the price of one good.
D. Decrease in income.
6. The percentage change in the quantity demanded of one good, divided by the percentage change in
price of another good, is called:
A.
B. Cross elasticity of supply
C. Cross elasticity of demand
D. Income elasticity of demand
7. Which of the following statements about a normal good is false:
A. Its income elasticity must be greater than 1.
B. Its cross elasticity of demand can be positive.
C. Its income elasticity can be 0.5
D. Its cross elasticity of demand can be negative.
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