Answer the following statement true (T) or false (F)
1) If price and total revenue are directly related, demand is inelastic.
2) If price changes and total revenue changes in the opposite direction, demand is relatively
elastic.
3) Cross elasticity of demand measures the effect of a change in the price of one product on the
quantity demanded of another product.
4) Income elasticity measures the effect of a change in income on the purchases of some good
or service.
5) If the coefficient of income elasticity of demand is positive, the product is an inferior good.
1) T
2) T
3) T
4) T
5) F
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If you want to know the present value of $10,000 received a year from today, and the interest rate is 4 percent, what formula can you use?
A) Present value equals $10,000 times 0.04. B) Present value equals 1.04 divided by $10,000. C) Present value equals $10,000 divided by 1.04 D) Present value equals $10,000 times 1.04.
Which of the following would probably not result in acquiring human capital?
A. Taking an economics course. B. Learning how to make chicken parmigiana. C. Playing varsity soccer. D. Purchasing a new piece of machinery.
The payroll tax receipts
a. are used to reduce the national debt. b. are invested in private business for future payments. c. pay off current recipients of Social Security payments. d. go directly into a trust fund for investment in private businesses.
If a producer were forced to absorb the cost of a spillover from the production of a good, this would likely cause the supply curve for the good to
A) shift out. B) shift to the left. C) shift to the right. D) None of the above are correct.