Choose the correct answer and explain why the answer is right

Section 2: Multiple Choice Questions (20 points) 1. Suppose that when the price of a good falls from $12 to $9. the quantity demanded of that good rises from 310 units to 350 units. What is the approximate price elasticity of demand between these two prices? 2. The more substitutes for a good. a) the lower its income elasticity of demand b) the higher its income elasticity of demand c) the lower its price elasticity of demand the higher its price elasticity of demand 3. If Casey bought 16 cotton t-shirts last year when her income was 540.000 and she buys 18 cotton t-shirts this year when her income is $45,000, then for Casey cotton t-shirts are a) an inferior good 9 a normal good c) a substitute good d) a complementary good Prlw tdotlarsi 0: 0| Guantlty ot Good :4 4. Refer to the Figure above. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X. Approximately what percentage of the tax do producers end up paying? a) 63 percent 45 percent c) 70 percent d) 55 percent