A common algebraic way of presenting the demand function is as follows: ln (Q) = a - bP + cI, where Q is quantity demanded, P is price, I is income. Here, c represents the percentage change in quantities demanded given a unit of increase in income. For a normal good, the value of c should be expected to be: Immersive reader

(17 points)

Positive

Negative

Positive and negative

There is not enough information to answer this question

None of the above

18Between 1970 and 1993, the real price of university education increased, as did the number of students enrolled in universities. Which of the following could have caused this increase in the price and enrollment of college students?

(17 points)

A shift to the right in the supply curve for university education and a shift to the left in the demand curve for university education

A shift to the left in the supply curve for university education and a shift to the right in the demand curve for university education

A shift to the left in the supply curve for university education and a shift to the left in the demand curve for university education

None of the above

19If the price of good X increases from $ 5 to $ 8, the quantity demanded falls from 100 to 80. Based on this information, you could say that the demand for good X is

(17 points)

Elastic

Inelastic

Unit elasticity

None of the above

20 Assume that beer is an inferior good. If the price of beer falls, then the substitution effect results in the person buying _____________ of the good, and the income effect results in the person buying ________________ of the good

(17 points)

more more

more less

less more

less, less

None of the above

21. Paul video only gets utility from CDs (C) and DVDs (D). Its utility function is U = C ^ (0.5) * D ^ (0.5). The UMGC when U = 40 and C = 4 is equal to:

(17 points)

0.025

0.05

0.2

0.5

None of the above

22 Given a demand function for books: Qd = 120 - P, and the supply of books is: Qs = 5P. If P = $ 15, which of the following statements is true?

(17 points)

There is a surplus equal to 30

There is a shortage equal to 30

There is a surplus, but it is impossible to determine how much it is

There is a shortage, but it is impossible to determine how much it is

None of the above