The income elasticity of a necessity is between zero and one.
a. true
b. false
Ans: a. true
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For consumers, taco chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of taco chips?
A) The equilibrium price of taco chips falls, and the equilibrium quantity decreases. B) The equilibrium price of taco chips rises, and the equilibrium quantity decreases. C) There is no change in the equilibrium price of taco chips, and the equilibrium quantity increases. D) The equilibrium price of taco chips could rise, fall, or stay the same, and the equilibrium quantity increases. E) The equilibrium price of taco chips rises, and the equilibrium quantity increases.
Which of the following would increase output in the short run?
a. an increase in stock prices makes people feel wealthier b. government spending increases c. firms chose to purchase more investment goods d. All of the above are correct.
Which of the following is an example of excess supply:
A. Price = $500, demand = 500, supply = 300 B. Price = $700, demand = 300, supply = 500 C. Price = $600, demand = 400, supply = 400 D. Price = $400, demand = 600, supply = 200
Aggregation involves adding together different products and services.
Answer the following statement true (T) or false (F)