Q1.If the income elasticity of a good is negative, then A. the good must be a...

 

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Q1.If the income elasticity of a good is negative, then A. the good must be a Giffen good. B. the substitution and income effects must be moving in the same direction. C. the Engel curve for this good must be downward sloping. D. the law of demand must be satisfied for this good. Q2. If the consumer purchased basket B last year and purchases basket C this year, we can conclude that A. the consumer is not behaving optimally. B. the consumer's tastes changed between this year and last year. C. the consumer's indifference curves cannot be convex. D. the law of demand does not hold for this consumer. Q3. The only situation where we can conclude that this consumer's tastes must have changed is when we observe him A. buying B last year and buying A this year. B. buying D last year and buying A this year. C. buying B last year and buying C this year. D. buying D last year and buying C this year. Q4.Refer to Goods X and Y. The relative price of good X in terms of good Y is always equal to A. the magnitude of the slope of the budget line. B. the marginal value of X in terms of Y. C. the horizontal intercept of the budget line. D. the vertical intercept of the budget line. Q5.The accompanying supply-demand diagram shows the market for calculators. The initial price of calculators is PO, and the initial quantity exchanged is Q0. Price Supply X Demand Quantity Which of the following situations could be correctly illustrated by the diagram? A. Graphing capabilities and other new features lead people to buy more calculators. B. The cost of memory chips used in calculators falls, lowering the price of calculators. C. Personal computerized notepads with substantial computing power are introduced, reducing people's need for calculators. D. A heavy tariff is placed on calculators imported from overseas. Q1.If the income elasticity of a good is negative, then A. the good must be a Giffen good. B. the substitution and income effects must be moving in the same direction. C. the Engel curve for this good must be downward sloping. D. the law of demand must be satisfied for this good. Q2. If the consumer purchased basket B last year and purchases basket C this year, we can conclude that A. the consumer is not behaving optimally. B. the consumer's tastes changed between this year and last year. C. the consumer's indifference curves cannot be convex. D. the law of demand does not hold for this consumer. Q3. The only situation where we can conclude that this consumer's tastes must have changed is when we observe him A. buying B last year and buying A this year. B. buying D last year and buying A this year. C. buying B last year and buying C this year. D. buying D last year and buying C this year. Q4.Refer to Goods X and Y. The relative price of good X in terms of good Y is always equal to A. the magnitude of the slope of the budget line. B. the marginal value of X in terms of Y. C. the horizontal intercept of the budget line. D. the vertical intercept of the budget line. Q5.The accompanying supply-demand diagram shows the market for calculators. The initial price of calculators is PO, and the initial quantity exchanged is Q0. Price Supply X Demand Quantity Which of the following situations could be correctly illustrated by the diagram? A. Graphing capabilities and other new features lead people to buy more calculators. B. The cost of memory chips used in calculators falls, lowering the price of calculators. C. Personal computerized notepads with substantial computing power are introduced, reducing people's need for calculators. D. A heavy tariff is placed on calculators imported from overseas.

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Question 1 If the income elasticity of a good is negative then Answer C The Engel curve for this goo... View the full answer