1. If substitutes are not readily available for a product, it hasA. Inelastic demand.B. Elastic demand....1...C. An income effect.D. A substitution effect.2. A price increase causes a fall in a company's total revenue. This indicates that demand for the company'sproducts isA. SteadyB. ElasticC. InelasticD. Fluctuating3. Which direction will the demand curve shift if consumers' income rise?A. To the rightB. To the leftC. UpwardD. Downward 4. Which of the following terms refers to the amount of money consumers have available to spend on products?A. Inelastic demand.B. Elastic demand.C. An income effect.D. substitution effect.

Answered: 1. If substitutes are not readily…

1. If substitutes are not readily available for a product, it has A. Inelastic demand. B. Elastic demand. C. An income effect. D. A substitution effect.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 4PA: A price change causes the quantity demanded of a good to decrease by 30 percent, while the total...

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Question

1. If substitutes are not readily available for a product, it has
A. Inelastic demand.
B. Elastic demand.
...
1...
C. An income effect.
D. A substitution effect.
2. A price increase causes a fall in a company's total revenue. This indicates that demand for the company's
products is
A. Steady
B. Elastic
C. Inelastic
D. Fluctuating
3. Which direction will the demand curve shift if consumers' income rise?
A. To the right
B. To the left
C. Upward
D. Downward

4. Which of the following terms refers to the amount of money consumers have available to spend on products?
A. Inelastic demand.
B. Elastic demand.
C. An income effect.
D. substitution effect.

Expert Solution

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Availability of substitutes is one of the determining factors of elasticity of demand. So the elasticity of a good with a close substitute and no substitute will be different.

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