19. Peanut butter and jelly are complementary goods. When the price of peanut bu

Question

19. Peanut butter and jelly are complementary goods. When the price of peanut butter rises, the demand for jelly ________ and the price of jelly ________. Answers:

rises; falls
   rises; rises
   falls; rises
   falls; falls

20.The measure of elasticity that economists use is. Answers:   

always a positive number.
   always a negative number.
   positive when demand is elastic and negative when demand is inelastic.
   negative when demand is elastic and positive when demand is inelastic.

21. Which of the following formulas is the correct expression for the slope of a line? Answers:

22. Graphically how would an increase in income affect the demand for hamburgers? Answers:

The slope of the demand curve would increase.
   The slope of the demand curve would decrease.
   The demand curve would shift outward, parallel to the original demand curve.
   The demand curve would shift inward, parallel to the original demand curve.

23. Given the equation P = $6.00 ? $.40Q, where P is the price of the good and Q is the quantity of the good demanded, how many units will this consumer demand if the price is $3.60? Answers:

1.44 units
   3 units
   3.6 units
   6 units

24. Which of the following is true about unit elasticity? Answers:

Revenues remain unchanged when the price changes.
   Elasticity of demand increases as one moves down the demand curve.
   Elasticity of demand decreases as one moves down the demand curve.
   The elasticity of demand is greater than one at every point along the demand curve.

25. Which of the following could be a determinant of the quantity demanded of a good? Answers:

The price of the good
   The price of related goods
   Income
   Expectations about the future price of the product
   All of the above

Explanation / Answer

Q19. Answer is Falls ; Falls. With the price of complimentary goods increase, demand of other good falls. And when the demand falls, there is a surplus in market resulting in fall in price. Q20. Answer is Always a negative. Explanation: Price elasticity of normal goods is always negative. Q21. Answer is   ^Y / ^ X Q22. Answer is Demand curve would shift outward parallel to original demand curve. Q23. Answer is 6 units. Explanation: By putting the value off P in equation, we get Q= 6 units Q24. Answer is Rrevenue remain unchanged with the price changes. Q25. Answer is The Price of good.

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