A 10 percent increase in income increases the quantity of apple juice demanded from 18,800 to 21,200 gallons. The income elasticity of demand for apple juice is
A) 0.5.
B) 0.8.
C) 1.0.
D) 1.2.
D
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Refer to the figure below. At the original market equilibrium: 
A. 40 cups are sold per hour at a price of $2.00 each. B. 50 cups are sold per hour at a price of $2.50 each. C. 50 cups are sold per hour at a price of $1.00 each. D. 60 cups are sold per hour at a price of $1.50 each.
If you spend more of your income on consumption goods, which of the following will occur?
A) Economic growth will be stimulated. B) For every dollar you spend on consumption, real GDP will fall by a dollar. C) Investments in education will rise. D) The production of investment goods will fall.
A characteristic common to most imperfectly competitive markets is
A) a homogeneous product. B) unexploited economies of scale. C) non-price competition among firms. D) inelastic market demand curves. E) common pricing among firms.
Answer the following statement(s) true (T) or false (F)
1. All cost increases are passed on to a firm's customers in the form of higher prices. 2. Higher fixed costs may cause a firm to shut down its operations but will not otherwise affect its production and pricing decisions. 3. Either a rise in marginal cost or a fall in marginal revenue could cause a firm to reduce its output. 4. Higher fuel costs would cause a delivery firm to raise the price it charges. 5. Higher insurance costs would cause a delivery firm to raise the price it charges.