Wealthy professors are more likely to shop at high end stores with shorter wait times at the cashier than poor students because
a. They value the item more than the student
b. They like wasting money
c. The opportunity cost of waiting in a cashier line is higher for professors than for undergraduate students
d. They like to show off
c
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An economist for a bicycle company predicts that, all else held constant, an increase in consumer incomes will increase the demand for bicycles. This prediction assumes that
A. there are many goods that are substitutes for bicycles. B. there are many goods that are complementary to bicycles. C. bicycles are a normal good. D. there are few goods that are substitutes for bicycles.
Depreciation allowance ________ the taxes a firm must pay and ________ the net present value of an investment.
A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases
The difference between price elasticity of demand and income elasticity of demand is that
A) income elasticity of demand examines how an individual's income changes when prices change and the price elasticity of demand examines how quantity demand changes when price changes. B) income elasticity refers to the movement along the demand curve while price elasticity refers to a horizontal shift of the demand curve. C) income elasticity measures the responsiveness of income to changes in supply while price elasticity of demand measures the responsiveness of demand to a change in price. D) income elasticity refers to a horizontal shift of the demand curve while price elasticity of demand refers to a movement along the demand curve.
Suppose diamonds have an absolute price elasticity of 0, the demand for the good is
A. unit elastic. B. inelastic. C. perfectly inelastic. D. elastic.