Eco test pt 2
17) Based on the following pieces of information, which fast food product do consumers see as the closest substitute for Wendy's Hamburgers? A) Kentucky Fried Chicken, which has a cross elasticity of 1.70 with Wendy's B) McDonalds hamburgers, which have a cross elasticity of 1.01 with Wendy's C) Pizza Hut pizza, which has a cross elasticity of zero with Wendy's D) Taco Bell tacos, which have a cross elasticity of -1.25 with Wendy's
A
If the demand for a good is perfectly elastic, the price elasticity of demand is ________ and the demand curve is ________. 50) A) zero; vertical B) infinite; horizontal C) zero; horizontal D) infinite; vertical
B
20) If the demand for a good is perfectly elastic, then the demand curve is horizontal
T
10) If the demand curve for oranges is a downward sloping straight line, the price elasticity of demand will increase the A) higher the price of oranges. B) higher the price of other fruits. C) higher the income level of consumers. D) lower the price of oranges.
A
The ________ the portion of your income spent on a good, the ________ is your demand for the good. 76) A) smaller; less price elastic B) larger; more price elastic C) smaller; more income elastic D) larger; more income elastic
A
The price elasticity of demand is 5.0 if a 10 percent increase in the price results in a ________ decrease in the quantity demanded. 44) A) 50 percent B) 10 percent C) 5 percent D) 2 percent
A
14) Total revenue for skis is at a maximum when the price elasticity of demand is A) between 0 and 1. B) 1. C) greater than 1. D) 0.
B
When consumers' incomes increased 10 percent, the quantity of milk bought increased 5 percent. This result means 66) A) milk is a luxury. B) milk is a necessity. C) milk is an inferior good. D) the demand for milk is income elastic
B
The more substitutes available for a product, the 71) A) smaller is its income elasticity of demand. B) larger is its income elasticity of demand. C) larger is its price elasticity of demand. D) smaller is its price elasticity of demand
C
When demand is ________, a decrease in price ________ total revenue. 54) A) elastic; does not change B) unit elastic; increases C) inelastic; decreases D) elastic; decreases
C
16) Which of the following shifts the supply curve rightward? A) an increase in the population B) a positive change in preferences for the good C) a decrease in the price of the good D) a decrease in the price of a factor of production used to produce the good
D
6) Houston Texans has just lowered the price of its football tickets from $350.00 to $300.00. As a result, there was an increase in the number of tickets purchased from 43,000 to 47,000. The price elasticity of demand for season tickets equals A) 1.71. B) 1.58. C) 0.71. D) 0.58.
D
Which of the following pairs of goods are most likely substitutes? A) lettuce and salad dressing B) DVDs and DVD players C) peanut butter and gasoline D) cola and lemon lime soda
D
12) Which of the following is true? A) For an inferior good, when income increases, the demand curve shifts leftward. B) The demand curve for a good shifts leftward when the price of a substitute rises. C) If consumers expect the price of a good will rise in the future, the demand curve shifts leftward. D) An increase in population shifts the demand curve for most goods leftward
A
17) A bakery can produce either cakes or cookies. If the price of cookies rises, then A) the supply curve of cake shifts leftward. B) the supply curve of cake shifts rightward. C) there is a movement downward along the supply curve of cakes. D) there is a movement upward along the supply curve of cakes.
A
23) If the price of a video rental is below its equilibrium price, there will be a ________ of video rentals and the price will ________ . A) shortage; rise B) shortage; fall C) surplus; rise D) surplus; fall
A
A hot dog vendor on a street corner could increase the quantity of hot dogs her customers demand by 12 percent if she lowers the price of a hot dog 10 percent. The demand for the hot dogs is 51) A) elastic. B) arc elastic. C) unit elastic. D) cross elastic
A
If the price of a good increases from $3 to $4, and the quantity demand remains unchanged, then the demand is 49) A) perfectly inelastic. B) somewhat elastic. C) infinite. D) perfectly elastic.
A
Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt increases. As a result, the demand for 8) A) tee-shirts will decrease that is, the demand curve will shift leftward. B) sweatshirts will increase that is, the demand curve will shift rightward. C) sweatshirts will decrease that is, the demand curve will shift leftward. D) tee-shirts will increase that is, the demand curve will shift rightward.
A
The law of demand states that, other things remaining the same, the higher the price of a good, the A) smaller is the quantity of the good demanded. B) larger is the demand for the good. C) larger is the quantity of the good demanded. D) smaller is the demand for the good.
A
The marketing people for AT&T believe that if they lower the price of long-distance phone calls by 5 percent, their quantity demanded will increase by 15 percent. If they are correct in their belief, then 57) A) the total revenue from long-distance phone calls will increase if they lower the price. B) the demand for long-distance phone calls is income elastic. C) the demand for long-distance phone calls is price inelastic. D) the total revenue from long-distance phone calls will decrease if they lower the price
A
Which of the following shifts the demand curve for hot dogs leftward? 7) A) an increase in the price of a hot dog bun B) an increase in the price of a hot dog C) a decrease in the price of a hot dog bun D) an increase in the price of a hamburger
A
1) The "law of demand" states that changes in A) demand are related directly to changes in supply. B) the quantity demanded of a good are not related to changes in the quantity supplied. C) the quantity demanded of a good are inversely related to changes in its price. D) demand are inversely related to changes in supply.
C
If an increase in price results in no change in total revenue, then demand must be 58) A) infinitely elastic. B) inelastic. C) unit elastic. D) elastic.
C
If demand for Farmer John's maple syrup is inelastic, then when Farmer John raises the price of maple syrup, his total revenue will 59) A) decrease. B) stay the same. C) increase. D) probably change, but more information is needed to determine if the total revenue increases, decreases, or stays the same.
C
The income elasticity of demand is ________ for a normal good and ________ for an inferior good. 65) A) negative; negative B) negative; positive C) positive; negative D) positive; positive
C
Which of the following does NOT shift the demand curve for broccoli? 13) A) a warning by the U.S. Surgeon General that broccoli causes schizophrenia B) a decrease in the price of spinach, a substitute for broccoli, because of a bumper crop of spinach this year C) an increase in the cost of fertilizer used to grow broccoli D) an increase in the price of spinach, a substitute for broccoli, because rodents gobbled up much of this year's spinach crop
C
21) The elasticity of demand is constant along a downward sloping straight-line demand curve.
F
An inferior good is a good whose income elasticity of demand is less than 0. 81
T
7) People buy more of good 1 when the price of good 2 rises. These goods are A) complements. B) substitutes. C) normal goods. D) inferior goods.
B
16) If a price hike of 5 percent increases the quantity demanded of another good by 2 percent, the goods must be ________ and the cross elasticity of demand equals ________. A) substitutes; 0.40 B) substitutes; 2.5 C) complements; 0.40 D) complements; 2.5
A
25) Which of the following raises the equilibrium price and increases the equilibrium quantity of used cars? A) a fall in income if used cars are an inferior good B) an increase in the wage rate paid to used car salespeople C) Neither of the above because the question suggests a violation of the "law of demand". D) Neither of the above because the question suggests a violation of the "law of supply".
A
The income elasticity of demand is defined as the percentage change in 64) A) the quantity demanded divided by the percentage change in income. B) income divided by the percentage change in quantity demanded. C) the quantity demanded resulting from a given percentage change in price. D) the movement along the demand curve resulting from a change in income
A
15) Which of the following explains why supply curves slope upward? A) prices and income B) increasing marginal cost C) resources and technology D) substitutes in production and complements in production
B
Because there are numerous choices for fast food purchases, the price elasticity of demand for Taco Bell food is likely 73) A) inelastic. B) elastic. C) perfectly inelastic. D) unitary elastic
B
13) If an increase in price results in no change in total revenue, then demand must be A) inelastic. B) elastic. C) unit elastic. D) infinitely elastic.
C
If the price of chicken falls, then in the market for beef 9) A) there is a movement upward along the demand curve for beef. B) there is a movement downward along the demand curve for beef. C) the demand curve for beef shifts rightward. D) the demand curve for beef shifts leftward.
D
On most days the price of a rose is $1 and 80 roses are purchased. On Valentine's Day the demand increases so that the price of a rose rises to $2 and 320 roses are purchased. Therefore, the price elasticity of 69) A) demand for roses is about 1.8. B) demand for roses is about 0.55. C) supply of roses is about 0.55. D) supply of roses is about 1.8.
D
The amount of time elapsed since a price change impacts the elasticity of demand because as more time passes, 72) A) the good's price will have a chance to return to its previous level. B) people can find more substitutes, and so the elasticity of demand decreases. C) people's incomes will increase, and so the elasticity of demand decreases. D) people can find more substitutes, and so the elasticity of demand increases
D
When the demand for a good is perfectly elastic, ________. 47) A) the demand curve for the good is vertical B) the price elasticity of demand is zero C) total revenue is as large as possible D) the price elasticity of demand is infinite
D
When the price of oranges increases from $4 to $6 per bag, the quantity demanded of oranges decreases from 800 bags to 700 bags. The price elasticity of demand over this price range is equal to 43) A) 3. B) 1/4 or 0.25. C) 3/7 or 0.4286. D) 1/3 or 0.3333.
D
24) A necessity (such as food and shelter) generally has an inelastic demand.
T
A necessity (such as food and shelter) generally has an inelastic demand. 84
T
Peanut butter and jelly are complements for consumers. In 2015, the price of peanut butter increased. As a result, the ________ which lead to ________ in the price of jelly and ________ in the quantity of jelly. 38) A) supply of jelly; a decrease; an increase B) demand for jelly; a decrease; a decrease C) demand for jelly; an increase; an increase D) supply of jelly; an increase; a decrease
B
Pizza Hut pizza has more close substitutes than does food in general. The price elasticity of demand for Pizza Hut pizza is ________ the price elasticity of demand for food in general. 79) A) the same as B) greater than C) less than D) not comparable to
B
To maximize its revenue 55) A) a firm should always charge the highest price possible regardless of the elasticity of demand. B) a firm facing inelastic demand should always raise its price. C) a firm facing elastic demand should always raise its price. D) None of the above answers is correct.
B
When consumers' incomes increased 6 percent, the quantity of wine bought increased 12 percent. This result means 67) A) wine is a necessity. B) wine is a luxury. C) the demand for wine is income inelastic. D) wine is an inferior good.
B
11) If Sam wants to increase her total revenue from her sales of flowers and she knows that the demand for flowers is price inelastic, she should A) lower her price to increase the demand and shift the demand curve rightward. B) raise her price because she knows that the quantity demanded will also increase. C) raise her price because she knows that the percentage decrease in the quantity demanded will be smaller than the percentage increase in price. D) lower her price because she knows that the percentage increase in the quantity demanded will be greater than the percentage decrease in price.
C
11) If consumers but not producers expect that the price of soda will rise in November, the A) supply of soda in October will increase. B) demand for soda in October will decrease. C) demand for soda in October will increase. D) supply of soda in October will decrease.
C
14) The "law of supply" refers to the fact that, all other things remaining the same, when the price of a good rises A) the supply curve shifts leftward. B) the supply curve shifts rightward. C) there is a movement up along the supply curve to a larger quantity supplied. D) there is a movement down along the supply curve to a smaller quantity supplied.
C
18) Bus rides and canned soup are inferior goods, so the ________ elasticity of demand is ________. A) cross; positive B) income; positive C) income; negative D) cross; negative
C
2) The "law of demand" is illustrated by a A) rightward shift of the demand curve. B) leftward shift of the demand curve. C) movement along the demand curve. D) Both answers A and B are correct.
C
2) When the quantity of coal is measured in kilograms instead of pounds, the demand for coal becomes A) more elastic. B) less elastic. C) neither more nor less elastic. D) undefined.
C
22) If a market is NOT in equilibrium, then which of the following is likely to occur? A) The demand curve will shift to bring the market to equilibrium. B) The supply curve will shift to bring the market to equilibrium. C) The price will adjust to bring the market to equilibrium. D) Both A and B are correct.
C
Deb's income has just risen from $950 per week to $1,050 per week. As a result, she decides to increase the number of movies she attends each month by 5 percent. Her demand for movies is 68) A) income elastic. B) represented by a vertical line. C) represented by a horizontal line. D) income inelastic.
D
Growers expect that the price of a bushel of wheat will increase in one month. This belief results in 25) A) a decrease in future supply of wheat. B) no change in current or future supply of wheat. C) an increase in current supply of wheat. D) a decrease in current supply of wheat.
D
If demand is price elastic, 48) A) a 1 percent decrease in the price leads to a decrease in the quantity demanded that is less than 1 percent. B) the price is very sensitive to any shift of the supply curve. C) a 1 percent increase in the price leads to an increase in the quantity demanded that exceeds 1 percent. D) a 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent.
D
The taxicab fare in Newville is regulated. The fare currently charged is $6 a ride. Newville taxicab drivers want to obtain government's permission to lower the fare, which they think will increase their total revenue. From this we can conclude that the drivers believe that the demand for taxicab rides is 56) A) unit elastic. B) inelastic. C) perfectly inelastic. D) elastic
D
What happens to the demand for Xbox games if the price of an Xbox falls? A) The demand for Xboxes remains unchanged. B) The demand for Xboxes decreases because the price of a substitute falls. C) The demand for Xboxes decreases because the price of a complement falls. D) The demand for Xboxes increases because the price of a complement falls.
D
23) The larger the portion of a person's total budget spent on a good, the more inelastic the demand for the good.
F
6) When the price of an inferior good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased. A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease
B
13) Which of the following shifts the demand curve for movie downloads rightward? A) A decrease in the price of downloading a movie. B) A 10 percent increase in people's income if movie downloads are a normal good. C) A decrease in the price of cable television service. D) An increase in the quantity and quality of programming included in the basic cable television service package.
B
19) If the income elasticity for chocolate chip cookies is 1.84, then chocolate chip cookies are A) a normal good and income inelastic. B) a normal good and income elastic. C) an inferior good and income inelastic. D) D) an inferior good and income elastic.
B
7) Demand is price inelastic if a relatively ________ price increase leads to a relatively ________ in the quantity demanded. A) large; small increase B) small; large decrease C) large; small decrease D) small; large increase
C
24) Ticket scalpers at the NBA playoff series between the Spurs and Clippers this year charged prices high above the printed ticket price. This observation is evidence of A) a surplus at printed ticket prices. B) a shortage at printed ticket prices. C) the tournament not being televised. D) the tournament getting too much television exposure.
B
12) Suppose Sandy's Candies wants to increase its total revenues. If Sandy increases the price of her candy, she must be assuming that the demand for candy is A) unit elastic. B) inelastic. C) elastic. D) income elastic.
B
5) When the price of a movie ticket increases from $5 to $7, the quantity of tickets demanded decreases from 600 to 400 a day. What is the price elasticity of demand for movie tickets? A) 0.83 B) 1.20 C) 1.00 D) 2.32
B
26) What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease? A) If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease. B) If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity of ice cream cones will increase. C) If ice cream cones are an inferior good, then the equilibrium price for an ice cream cone will increase and the equilibrium quantity of ice cream cones will decrease. D) If ice cream cones are an inferior good, then the equilibrium price and quantity of ice cream cones will decrease.
A
3) The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of A) a decrease in the quantity demanded of cereal because of the substitution effect. B) an increase in the quantity demanded of eggs because of the income effect. C) a decrease in the quantity supplied of cereal because of the substitution effect. D) an increase in the quantity supplied of eggs because of the income effect
A
5) When the price of a normal good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased. A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease
A
8) If the demand for a good is elastic, the price elasticity of demand is ________. A) greater than 1 B) equal to 1 C) between 0 and 1 D) less than zero
A
An 18 percent increase in the price of a small car results in a 10 percent increase in the quantity supplied. The price elasticity of supply is equal to 70) A) 0.55. B) 1.80. C) 0.75. D) 0.40.
A
If the price of a burger decreases by 5 percent and as a result the quantity of burgers demanded increases by 8 percent, the price elasticity of demand equals 42) A) 1.60. B) 0.60. C) 0.625. D) 0.40.
A
If the price of lumber rises, then, in the market for sawdust 24) A) the supply curve of sawdust shifts rightward. B) the supply curve of sawdust shifts leftward. C) there is a movement downward along the supply curve for sawdust. D) there is a movement upward along the supply curve for sawdust
A
If the quantity supplied exceeds the quantity demanded, then there is 34) A) a surplus and the price is above the equilibrium price. B) a shortage and the price is below the equilibrium price. C) a surplus and the price is below the equilibrium price. D) a shortage and the price is above the equilibrium price.
A
In the summer 2012 the lobster catch in Maine was especially large, but instead of celebrating the fisherman were suffering from a lower total revenue. (Source: New York Times, July 28, 2012) We learn from the article that despite the larger quantity of lobster caught, the total revenue of the fisherman decreased. This fact means that the demand for lobster is 60) A) inelastic. B) perfectly elastic. C) unit elastic. D) elastic.
A
The demand for ________ is more elastic than the demand for ________. 74) A) Pepsi; all soft beverages B) food; exotic vacations C) chewing gum; cars D) all personal computers; Dell computers
A
The demand for food in poor countries is 80) A) inelastic but more elastic than in rich countries. B) elastic but less elastic than in rich countries. C) elastic and more elastic than in rich countries. D) inelastic and more inelastic than in rich countries
A
The price elasticity of demand for new cars is 1.2. Hence, a 10 percent price increase will 45) A) decrease the quantity of new cars demanded by 12 percent. B) increase consumer expenditure on new cars by 12 percent. C) decrease the quantity of new cars demanded by 1.2 percent. D) increase consumer expenditure on new cars by 1.2 percent
A
Which of the following decreases the demand for an inferior good? 12) A) an increase in income B) a decrease in the price of a complement C) an increase in the price of a substitute D) a decrease in income
A
A supply curve shows the relation between the quantity of a good supplied and 22) A) the price of the good. Usually a supply curve has negative slope. B) the price of the good. Usually a supply curve has positive slope. C) income. Usually a supply curve has positive slope. D) income. Usually a supply curve has negative slope.
B
By definition, an inferior good is a 11) A) good for which demand decreases when its price rises. B) good for which demand decreases when income increases. C) normal substitute good. D) want that is not expressed by demand.
B
If a consumer is relatively insensitive to changes in the price of a good, then the consumer's demand for the good is 46) A) elastic. B) inelastic. C) unit elastic. D) perfectly elastic.
B
If the cross elasticity of demand between coffee and tea is positive, an increase in the price of tea will shift the demand curve for 62) A) tea rightward. B) coffee rightward. C) coffee leftward. D) tea leftward
B
If the price of a video rental is below its equilibrium price, there will be a ________ of video rentals and the price will ________. 29) A) shortage; fall B) shortage; rise C) surplus; rise D) surplus; fall
B
If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 12,000 per year, there is a ________ in the market and the price will ________. 30) A) shortage; fall B) shortage; rise C) surplus; rise D) surplus; fall
B
Which of the following goods would have the smallest elasticity of demand? 78) A) a bottle of Bayer Aspirin sold to someone without a headache B) insulin sold to diabetics C) Exxon brand premium unleaded gasoline D) an education at Harvard Law School sold to recent college graduates
B
1) The price elasticity of demand is equal to the ________ in the ________ divided by the ________ in the ________. A) percentage change; price; percentage change; quantity demanded B) change; price; change; quantity demanded C) percentage change; quantity demanded; percentage change; price D) change; quantity demanded; change; price
C
9) A changes in which of the following shifts the demand curve for hamburgers? A) an increase in the price of the meat used to produce hamburgers B) an increase in the price of a hamburger C) a fall in the price of french fries, a complement for hamburgers D) an increase in the number of hamburger restaurants
C
Beef and leather belts are complements in production. If people's concern about health shifts the demand curve for beef leftward, the result in the market for leather belts will be a 39) A) lower equilibrium price for a leather belt because there is an increase in the supply of leather belts. B) higher equilibrium price for a leather belt because there is an increase in the supply of leather belts. C) higher equilibrium price for a leather belt because there is a decrease in the supply of leather belts. D) lower equilibrium price for a leather belt because there is a decrease in the supply of leather belts.
C
Blank DVDs and prerecorded DVDs are substitutes in production. An increase in the price of a blank DVD will lead to 23) A) an increase in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. B) a decrease in the quantity supplied of prerecorded DVDs but not in the supply of prerecorded DVDs. C) a decrease in the supply of prerecorded DVDs. D) an increase in the supply of prerecorded DVDs.
C
If good A is a normal good and income increases, the equilibrium price of A ________ and the equilibrium quantity of A ________. 37) A) rises; decreases B) falls; increases C) rises; increases D) falls; decreases
C
If the cross elasticity of demand is -5 between french fries and orange drink, then french fries 63) A) are a normal good and orange drink is an inferior good. B) are an inferior good and orange drink is a normal good. C) and orange drink are complements. D) and orange drink are substitutes.
C
If the demand curve is a downward sloping straight line, the price elasticity of demand always 52) A) increases as the demand curve shifts rightward. B) decreases with movements upward along the demand curve. C) increases with movements upward along the demand curve. D) increases as the demand curve shifts leftward
C
In the market for magazines, the "income effect" means that A) a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. B) an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines. C) an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. D) magazines are usually purchased by people with higher than average incomes.
C
Suppose people buy more of good 1 when the price of good 2 falls. These goods are A) normal. B) inferior. C) complements. D) substitutes.
C
The "law of demand" is illustrated by a A) rightward shift of the demand curve. B) leftward shift of the demand curve. C) movement along the demand curve. D) Both answers A and B are correct.
C
The cross elasticity of demand is calculated as the percentage change in the 61) A) price of one good divided by the percentage change in the price of another good. B) quantity demanded of one good divided by the percentage change in the quantity demanded of another good. C) quantity demanded of one good divided by the percentage change in the price of another good D) price of one good divided by the percentage change in the quantity demanded of another good.
C
10) Oatmeal is a normal good and cold cereal is a substitute for oatmeal. Raisins are a complement for oatmeal. Which of the following increases the demand for oatmeal? A) an increase in the price of raisins B) a decrease in income C) a decrease in population D) an increase in the price of cold cereal
D
15) If the cross elasticity of demand for good x with respect to the price of good y is positive, then goods x and y are A) normal goods. B) inferior goods. C) complements. D) substitutes.
D
3) The price elasticity of demand for oranges ________ change if the units of the quantity was changed from pounds to kilograms and ________ change if the units of the price was changed from dollars to cents. A) would; would B) would; would not C) would not; would D) would not; would not
D
4) Dan sells newspapers. Dan says that a 4 percent increase in the price of a newspaper will decrease the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is ________. A) Inelastic B) unit elastic C) perfectly elastic D) elastic
D
4) When the price of a good falls, the income effect for a normal good implies that people buy A) less of that good because the relative price of the good has fallen. B) more of that good because the relative price of the good has risen. C) less of that good because they cannot afford to buy all the things they previously bought. D) more of that good because they can afford to buy more of all the things they previously
D
8) Ham and eggs are complements. If the price of ham rises, the demand for eggs will A) increase or decrease but the demand curve for ham will not change. B) decrease and the demand curve for ham will shift rightward. C) not change but there will be a movement along the demand curve for eggs. D) decrease and the demand curve for eggs will shift leftward.
D
Along a straight-line demand curve, as the price falls the 53) A) demand is always unitary elastic. B) demand becomes more elastic. C) elasticity of demand is constant. D) demand becomes less elastic.
D
The demand for a good is less price elastic 77) A) in the long run than in the short run. B) if closer substitutes are available. C) if the good is a luxury rather than a necessity. D) if the share of the good in the average consumer's budget is smaller.
D
Which of the following increases the demand for a normal good? 10) A) an increase in the price of a complement B) an decrease in the price of a substitute C) a decrease in income D) the price of the good is expected to increase in the future
D
Which of the following items has the largest price elasticity of demand? 75) A) oranges B) fruit C) food D) oranges from a Wal-Mart SuperCenter
D
22) If Taco Bell determines that the demand for its food is elastic, Taco Bell should raise its price to increase its total revenue.
F
If the cross elasticity of demand between Jeep Cherokees and Chevy Lumina Vans is 1.55, then the two vehicles are not substitutes in the eyes of car buyers. 83)
F
The larger the portion of a person's total budget spent on a good, the more inelastic the demand for the good. 85
F
Price elasticity of demand is a units-free measure. 82
T