The law of demand states that the quantity of a good demanded varies a. Directly with the population. b. Directly with income. c. Inversely with its price.
Q: Select one:
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A: Options C and D are correct.
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Q: Inferior goods are those for which demand increases asA) income decreases. B) income increases. C)…
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Q: True/False With a fall in the income demand for the normal goods will rise
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Q: 0. Law of demand shows relation between
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Q: Which type of elasticity is this?
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Q: Cross elasticity of demand.
A: Cross elasticity of demand measures the responsiveness of changes in the demand for one good caused…
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Q: True/False The demand of normal good rise with the fall in income
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- If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?Does an in income always shift income demand carves (for goods) to the right? why or why not?True/False With a fall in the income demand for the normal goods will rise
- Choose the right answer: 1. In drawing an individual’s demand curve for a commodity, all but which one of the following are kept constant? a, The individual’s money income, b, The prices of other commodities, c, The price of the commodity under consideration, d, The tastes of the individuals. 2. A fall in the price of a commodity, holding everything else constant, results in and is referred to as: a, an increase in demand, b, a decrease in demand, c,an increase in the quantity demanded, d, a decrease in the quantity demanded. 3. When anindividual’s income rises, while everything else remains the same), that person’s demand fora normal good: a, rises, b, falls, c, remains the same, d,any of the above. 4. When an individual’s income falls, while everything else remains the same, that person’s demandfor an inferior good: a, increases, b, decreases, c,remains unchanged, d, we cannot say without additional information.If a 10% decrease in the price of one product thatyou buy causes an 8% increase in quantity demandedof that product, will another 10% decrease in the pricecause another 8% increase (no more and no less) inquantity demanded?Q.3 a) A change in consumer’s expectations causes a movement along the demand curve or a shift in the demand curve? Explain. A change in price of the goods results in a movement along the demand curve or a shift in the demand curve? Explain b) A demand schedule for a normal good is as follows: Price Quantity demanded Rs.230 70 210 90 190 110 170 130 i) Do you think that the increase in quantity demanded (say, from 90 to 110 in the table) when price decreases (from Rs.210 toRs.190) is due to a rise in consumers’ income? Explain clearly (and briefly) why or why not. ii) Now suppose that the good is an inferior good. Would the demand schedule still be valid for an inferior good?
- Income elasticity of demand measures How the quantity demanded changes as consumer income changes How the quantity supplied changes as consumer income changes How consumer purchasing power is affected by a change in the price of a good How the price of a good is affected when there is a change in consumer income How variable a consumer?s income is given the variability in the economyIf the economy goes into a recession and incomesfall, what happens in the markets for inferior goods?a. Prices and quantities both rise.b. Prices and quantities both fall.c. Prices rise and quantities fall.d. Prices fall and quantities rise.The demand equation for school lunches is x=100-10pwhere x is the number of lunches purchases and p is the price in dollars. Which of the following represents E(p)? A) p/10-p b) -p/10-p c) p/20-p d) -p/100-10p e) p2/100-10p
- Kari requests two goods: X and Y. The utility function is given by: U(XY)=X-Y. Prices of X and Y is Px and Py, and budget is of m dollars. a) Deduce Karis demand for good X and Y b) Suggest price X and Y is showed by Px = 4 and Py = 2 and income, M, is 30. How much will she demand of X and Y? c) Karis wage is doubled. How does this affect her adjustment? Show graphically and mathematically d) is good X and Y normal or inferior goods?At any point on an ind ifference curve, the slope of thecurve measures the consumer'sa. income.b. wi l lingness to trade one good for the other,c. perception of the two goods as substitutes orcomplements,d. elasticity of demand.Suppose that the price of scones = $3, coffee costs $2.5 per cup, and average annual disposable income for students is $15,000. Calculate the demand curve ( NOTE– be certain to enter income appropriately – how is income denominated? What happens to the predicted number of bagels sold per day if the price of bagels is increased from $1 to $2? Is this a change in demand or a change in quantity demanded? Initial Quantity: __________________________________ Terminal Quantity __________________________________ Change in Demand or Change in Quantity Demanded (Choose One) Holding the price of bagels again at $1, what happens to the predicted number of bagels sold per day if the price of coffee increases from $2.5 to $5 per cup. Is this a change in demand or a change in quantity demanded? = -20P + 10Ps - 20Pc +10I Initial Quantity: _____________________________________ Terminal Quantity _____________________________________ Change in Demand…