Figure 3 shows __________. a perfectly inelastic supply curve a perfectly inelas
ID: 1250591 • Letter: F
Question
Figure 3 shows __________.
a perfectly inelastic supply curve
a perfectly inelastic demand curve
a perfectly inelastic demand curve or a perfectly inelastic supply curve
none of the above
If your income goes down by 15 percent and you cut back on your manicures by 25 percent, then your demand for manicures is __________.
income elastic
income inelastic
income elastic and income inelastic
neither income elastic nor income inelastic
If our income elasticity for vacation trips is 2.8, we may conclude that vacation trips are __________.
a normal service
an inferior service
both a normal service and an inferior service
neither a normal service nor an inferior service
When the cross elasticity of demand for two services is negative, then these services are __________.
complements
substitutes
both complements and substitutes
neither complements nor substitutes
A firm seeking to maximize its total revenue would lower its price until price elasticity of demand was __________.
a maximum
a minimum
one
If the price of iPods is reduced by 50 percent and the quantity of songs demanded on iTunes rises by 25 percent, then the cross elasticity of demand for iPods and iTune songs is __________.
5.0
1.0
0.5
0.25
Figure 3Explanation / Answer
1. "3. a perfectly inelastic demand curve or a perfectly inelastic supply curve" 2. "1. income elastic" 3. "3. a normal service" 4. "1. complements" 5. "3. One" 6. "3. 0.5"
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