Question

40) The cross elasticity of demand for butter and margarine is likely to be A) positive...

40) The cross elasticity of demand for butter and margarine is likely to be A) positive because they are substitutes.
B) positive because they are complements.
C) negative because they are substitutes.
D) negative because they are complements.
E) positive because they are normal goods.

41) If an increase in the price of green ketchup increases the demand for red ketchup, then
A) red and green ketchup are substitutes.
B) red and green ketchup are normal goods.
C) the cross elasticity of demand for these two kinds of ketchup is positive. D) Both answers A and C are correct.
E) Both answers A and B are correct.

42) If the cross elasticity of demand between Coke and Pepsi is 2.02, then Coke and Pepsi are
A) complements.
B) substitutes.
C) normal goods.
D) inferior goods.
E) Both answers B and C are correct.

43) The cross elasticity between computers and software is A) negative because they are substitutes.
B) positive because they are substitutes.
C) negative because they are complements.
D) positive because they are complements.
E) positive because they are normal goods.

44) When two goods are related such that an increase in the price of one good decreases the quantity demanded of the
other good, these goods are definitely A) normal goods.
B) luxury goods.
C) complements.
D) substitutes.
E) inferior goods.

45) The cross elasticity of demand for film cameras and film is likely to be
A) positive because they are substitutes.
B) positive because they are complements.
C) negative because they are substitutes.
D) negative because they are complements.
E) negative because with the advent of digital cameras, film and film cameras are inferior goods

46) The income elasticity of demand is a measure of
A) how demand for a product changes when the price of a substitute or complement product changes.
B) how responsive consumers are to changes in the price of a product.
C) how responsive suppliers are to changes in the price of a product.
D) the extent to which the demand for a good changes when income changes.
E) the extent to which the supply of a good changes when the demand changes as a result of a change in income.

47) The income elasticity of demand is
A) positive for a normal good.
B) zero for an inferior good.
C) less than one for an income elastic normal good. D) Only answers A and B are correct.
E) Answers A, B, and C are correct.

48) The income elasticity of demand for skiing trips to Vermont is greater than one. Thus a trip to Vermont for skiing is ____
good.
A) a normal
B) an inferior
C) a unit elastic
D) a price elastic E) a price inelastic

49) If a 5 percent increase in income brings about a 10 percent decrease in the demand for a good, then the
A) good is a normal good.
B) good is an inferior good.
C) income elasticity of demand is 0.5. D) income elasticity of demand is 2.0. E) income elasticity of demand is 5.0.

50) If a 5 percent decrease in income leads to a 15 percent decrease in the demand for a good, the income elasticity of demand equals ____
A) -1/3 and the good is an inferior good.
B) 1/3 and demand for the good is income elastic.
C) 3 and the good is a normal good.
D) -3 and the demand for the good is income inelastic. E) 3 and the good is an inferior good

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The cross (also called cross-price) elasticity of demand is Select one: a. positive for inferior goods...
The cross (also called cross-price) elasticity of demand is Select one: a. positive for inferior goods b. positive for complements c. positive for substitutes d. positive for normal goods e. never positive
If the cross-price elasticity of demand between two goods is -0.5, two goods are __________. If...
If the cross-price elasticity of demand between two goods is -0.5, two goods are __________. If the income elasticity of a good is -2, that good is a ___________. Substitutes: Normal good Complements: Inferior Complements: Necessity Substitutes: Luxury
1) The income elasticity of demand for Good Z is –0.2, while the cross-price elasticity of...
1) The income elasticity of demand for Good Z is –0.2, while the cross-price elasticity of demand between Good Z and Good Y is 1.63. Which of the following statements is correct regarding Good Z? Group of answer choices Good Z is a inferior good, and Goods Z and Y are complements. Good Z is an inferior good, and Goods Z and Y are substitutes. Good Z is a normal good, and Goods Z and Y are complements. Good Z...
Determine the price elasticity of demand, the cross-price elasticity of demand or the income elasticity in...
Determine the price elasticity of demand, the cross-price elasticity of demand or the income elasticity in the following scenarios. a. Consider the market for coffee. Suppose the price rises from $4 to $6 and quantity demanded falls from 120 to 80. What is price elasticity of demand? Is coffee elastic or inelastic? b. John’s income rises from $20,000 to $22,000 and the quantity of hamburger he buys each week falls from 2 pounds to 1 pound. What is his income...
The price elasticity of demand uses the absolute value because it is sometimes negative or always...
The price elasticity of demand uses the absolute value because it is sometimes negative or always negative .The income and cross elasticities of demand do not use the absolute value because they can be negative only, positive only or positive or negative The income elasticity of demand is positive for a normal or inferior good and negative for an inferior or normal good. The​ cross-price elasticity of demand is positive for complementary or substitute goods and negative for complementary or...
A study reports that the estimated cross price elasticity of demand between lettuce and tomatoes is...
A study reports that the estimated cross price elasticity of demand between lettuce and tomatoes is -1.1 and the estimated income elasticity of demand for lettuce is 0.4. Which of the following is true? Group of answer choices Tomatoes and lettuce are substitutes, and lettuce is a normal good Tomatoes and lettuce are substitutes, and lettuce is an inferior good. Tomatoes and lettuce are complements, and lettuce is a normal good. Tomatoes and lettuce are complements, and lettuce is an...
Economists estimated that the cross - price elasticity of demand for beer and wine is -...
Economists estimated that the cross - price elasticity of demand for beer and wine is - 0.83 and the income elasticity of wine is 5.03. This means that A. beer and wine are complements and wine is a luxury good B. beer and wine are substitutes and wine is a luxury good. C. beer and wine are complements and wine is an inferior good. D. beer and wine are substitutes and wine is an inferior good. Can someone please explain?...
Price Elasticity of Demand for good X: −0.34 Income Elasticity of Demand for good X: 0.56...
Price Elasticity of Demand for good X: −0.34 Income Elasticity of Demand for good X: 0.56 Cross Price Elasticity of Demand for goods X and Y: 0.04 Given the information above, determine the following: 1. whether good X is elastic, unit elastic, or inelastic 2. whether good X follows the “law” of demand 3. whether good X is normal or inferior 4. whether good X is a luxury or a necessity 5. whether good X and good Y are complements,...
Last year, Shelley bought 6 pairs of designer jeans when her income was $40,000. This year,...
Last year, Shelley bought 6 pairs of designer jeans when her income was $40,000. This year, her income is $50,000, and she purchased 10 pairs of designer jeans. Holding other factors constant, it follows that Shelley a. considers designer jeans to be an inferior good. b. considers designer jeans to be a necessity. c. has a low price elasticity of demand for jeans. d. considers designer jeans to be a normal good. QUESTIONm 23 Cross-price elasticity of demand measures how...
The cross-price elasticity of demand between good A and good B is positive. Are good A...
The cross-price elasticity of demand between good A and good B is positive. Are good A and good B complements or substitutes?