Suppose the demand for gourmet coffee can be represented by a linear demand curve. At the prevailing market price the income elasticity of demand for gourmet coffee is 2. When income rises the demand curve for gourmet coffee:
A) becomes less elastic at every price.
B) becomes less elastic at the price that prevailed before the change in income
C) becomes more elastic at every price
D) becomes more elastic at the price that prevailed before the change in income
A
You might also like to view...
Which of the following shifts both the short-run aggregate supply curve and the long-run aggregate supply curve?
I. changes in the size of the labor force II. changes in the money wage rate III. changes in the quantity of capital A) II only B) both I and II C) both I and III D) I, II and III
Normal goods are those for which demand decreases as
A) the price of a complement falls. B) the price of a substitute falls. C) income decreases. D) the good's own price rises.
Fast Copy is a perfectly competitive firm. The figure above shows Fast Copy's cost curves. If the market price is 2 cents per page, what is Fast Copy's profit maximizing level of output?
A) 16 pages per hour B) 32 pages per hour C) 48 pages per hour D) 64 pages per hour
A decrease in the U.S. price level will: a. decrease U.S. imports
b. decrease U.S. exports. c. decrease the quantity of RGDP demanded in the United States. d. both (a) and (c)