Multiple choice 14. Mark is a Canadian lumberjack whose income increases from $1,200 per week to $1,500 per week. If his demand for restaurant meals rises from 2 to 4 per week then... Select one: a. Ey = 3 b. Ey = 0.5 c. Ey = 2.5 d. Ey = -1
Multiple choice
14. Mark is a Canadian lumberjack whose income increases from $1,200 per week to $1,500 per week. If his
Select one:
a.
Ey = 3
b.
Ey = 0.5
c.
Ey = 2.5
d.
Ey = -1
15. Which of the following would help support the argument for legalizing drugs?
Select one:
a.
None of the other choices
b.
The demand curve for illegal drugs in relatively elastic
c.
The demand curve for illegal drugs is relatively inelastic
d.
The demand curve for illegal drugs is perfectly elastic
16. The Philippines Government is thinking of increasing taxes on gasoline and cigarettes in order to raise tax revenue. This would...
Select one:
a.
None of the above are correct
b.
Be a good idea if gasoline and cigarettes are inelastic goods
c.
Be a poor idea because people would stop consuming these goods
d.
Be a good idea if gasoline and cigarettes are elastic goods
17. If Exy > 0 then goods x and y are
Select one:
a.
Substitutes
b.
Normal goods
c.
Inferior goods
d.
Complements
18. Which of the following is true if an excise tax is levied and demand is inelastic?
Select one:
a.
The price increase will be large and the producer will bear most of the tax burden.
b.
None of the other choices
c.
The price increase will be large and the consumer will bear most of the tax burden
d.
The price increase will be small and the producer will bear most of the tax burden
19. Moving downward along a linear demand curve
Select one:
a.
None of the other choices
b.
Price
c.
Price elasticity of demand is constant
d.
Price elasticity of demand is increasing
20. Moving downward along a linear demand curve
Select one:
a.
None of the other choices
b.
Price elasticity of demand is decreasing
c.
Price elasticity of demand is constant
d.
Price elasticity of demand is increasing
21. Referring to the previous question, goods A and B are...
Select one:
a.
Price elastic
b.
Price inelastic
c.
Substitutes
d.
Complement
22. If Philippines-made furniture has a price elasticity (Ed) of 2 then...
Select one:
a.
The furniture is perfectly inelastic
b.
The furniture is inelastic
c.
The furniture is unitary elastic
d.
The furniture is elastic
23. A tennis racquet falls in price from $150 to $120, causing quantity demanded at a particular sporting goods store to rise from 80 to 120 in a given week. Using the min-point formula, the price elasticity of demand for tennis racquets at this store is...
Select one:
a.
1.0
b.
1.8
c.
1.4
d.
0.5
24.A perfectly elastic demand curve would apply to what type of good?
Select one:
a.
None of the other choices
b.
A good with a price elasticity of 1.
c.
A necessity good such as medication for an illness.
d.
A good that is being sold in a
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