24.) If income elasticity for a good or service isthen we can say that the good

Question

24.) If income elasticity for a good or service isthen we can say that the good or service is A. zero; inferior B. negative; normal C. positive; inferior D. positive; normal 25.) When the cross elasticity of demand isthe goods or services are A. zero; substitutes B. negative; substitutes C. positive;, complements D. positive; substitutes 26.) Since the cross elasticity of demand between hamburger patties and cheese is goods. negative, these are A. complementary B. substitutable C. normal D. both complementary and substitutable If demand is A. inelastic; raised; increase B. elastic; raised; increase C. inelastic; lowered; increase D. elastic; lowered; decrease 27.) and price istotal revenue will 28) A 4% decline in the price of laser printers causes the quantity demanded to rise by 8%. The demand for laser printers is A. perfectly elastic. B. elastic. C. unit elastic. D. inelastic.

Explanation / Answer

a) "D"

IF the income elasticity is positive then the good is normal. For the inferior good, it is negative.

b) "D"

If the cross price elasticity is positive the goods are substitute i.e. the demand for the other good increase if the price of the current good rises.

c) "A"

Complementary goods have a negative cross elasticity.

d) "A"

If demand is inelastic and the price is raised, the total revenue will increase.

e) "B"

As the change in the quantity is more than the proportional increase in the price the demand is elastic.

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