4. An increase in the price of gasoline will most likely cause the demand curve of tyres to change in which direction. A To the left, because gasoline and tyres are substitutes. B To the left, because gasoline and tyres are complements. C To the right, because gasoline and tyres are substitutes. D To the right, because gasoline and tyres are complements. E To the right, because an increase in the price of gasoline makes consumers poorer and thus not willing to pay as much for tyres. 5. For an inferior good, the quantity demanded A Does not change when income rises or falls. B Rises when income falls. C Falls when income falls. D Rises when income rises. E Responds directly to changes in income. 6. The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors, then A The marginal product, the average product and total product of the variable factor will eventually decrease. B Total product will eventually begin to fall. C The average product will eventually decrease with constant marginal product. D The marginal product will eventually decrease with constant average product. E The average product will eventually decrease, but only if total product is held constant.
4. An increase in the price of gasoline will most likely cause the demand curve of tyres to change in which direction. A To the left, because gasoline and tyres are substitutes. B To the left, because gasoline and tyres are complements. C To the right, because gasoline and tyres are substitutes. D To the right, because gasoline and tyres are complements. E To the right, because an increase in the price of gasoline makes consumers poorer and thus not willing to pay as much for tyres. 5. For an inferior good, the quantity demanded A Does not change when income rises or falls. B Rises when income falls. C Falls when income falls. D Rises when income rises. E Responds directly to changes in income. 6. The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors, then A The marginal product, the average product and total product of the variable factor will eventually decrease. B Total product will eventually begin to fall. C The average product will eventually decrease with constant marginal product. D The marginal product will eventually decrease with constant average product. E The average product will eventually decrease, but only if total product is held constant.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter5: Elasticity
Section: Chapter Questions
Problem 31CTQ: Economists define normal goods as having a positive income elasticity. We can divide normal goods...
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Transcribed Image Text:4. An increase in the price of gasoline will most likely cause the demand curve of tyres to
change in which direction.
A To the left, because gasoline and tyres are substitutes.
B To the left, because gasoline and tyres are complements.
C To the right, because gasoline and tyres are substitutes.
D To the right, because gasoline and tyres are complements.
E To the right, because an increase in the price of gasoline makes consumers poorer and thus
not willing to pay as much for tyres.
5. For an inferior good, the quantity demanded
A Does not change when income rises or falls.
B Rises when income falls.
C Falls when income falls.
D Rises when income rises.
E Responds directly to changes in income.
6. The law of diminishing returns states that if increasing quantities of a variable factor are applied
to a given quantity of fixed factors, then
A The marginal product, the average product and total product of the variable factor will eventually decrease.
B Total product will eventually begin to fall.
C The average product will eventually decrease with constant marginal product.
D The marginal product will eventually decrease with constant average product.
E The average product will eventually decrease, but only if total product is held constant.
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