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ECON 528 Mid-term third 15 || CORRECTLY SOLLVED!!
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Elvira decreased her consumption of bananas when the price of peanut butter increased. For Elvira, peanut butter and bananas are A) substitutes in consumption. B) both inferior goods. C) complements in consumption. D) both luxury goods. correct answers c A change in which variable will chang...

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  • August 18, 2024
  • 3
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • elvira decreased her consumption of bananas when t

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  • Econ 528
  • Econ 528

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ECON 528 Mid-term third 15 || CORRECTLY
SOLLVED!!
Elvira decreased her consumption of bananas when the price of peanut butter increased. For
Elvira, peanut butter and bananas are
A) substitutes in consumption.
B) both inferior goods.
C) complements in consumption.
D) both luxury goods. correct answers c

A change in which variable will change the market demand for a product?
A) the price of the product
B) population
C) technology
D) the prices of substitutes in production correct answers b

Suppose the value of the price elasticity of demand is -3. What does this mean?
A) A 1 percent increase in the price of the good causes quantity demanded to increase by 3
percent.
B) A 1 percent increase in the price of the good causes quantity demanded to decrease by 3
percent.
C) A 3 percent increase in the price of the good causes quantity demanded to decrease by 1
percent.
D) A $1 increase in price causes quantity demanded to fall by 3 units. correct answers b

If the cross-price elasticity of demand for computers and software is negative, this means the
two goods are
A) substitutes.
B) complements.
C) inferior.
D) normal. correct answers b

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of
beer is 0.09. This means that
A) an increase in the price of beer will increase the quantity demanded of beer and beer is a
normal good.
B) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer
is a normal good.
C) a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer
is an inferior good.
D) an increase in the price of beer correct answers b

Which of the following statements about the price elasticity of demand is correct?
A) The elasticity of demand for a good in general is equal to the elasticity of demand for a
specific brand of the good.
B) The absolute value of the elasticity of demand ranges from zero to one.
C) Demand is more elastic in the long run than it is in the short run.
D) Demand is more elastic the smaller the percentage of the consumer's budget the item takes
up. correct answers c

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