The market demand for wheat is Q = 100 - 2p + 1pb + 2Y. If the price of wheat, p, is $2, and the price of barley, pb, is $3, and income, Y, is $1000, the income elasticity of wheat is
A) 2 ? (1000/2099 ).
B) 2.
C) 1/2 ? (1000/2099 ).
D) cannot be calculated from the information provided.
A
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Why do economists like competitive markets?
A. Competitive markets result in optimal and efficient levels of production. B. Competitive markets result in lower levels of production. C. Competitive markets are the best way to allocate every good or service. D. Competitive markets result in high prices and profit for sellers.
The Fed controls bank lending and thus the process of money creation through its power to
A) alter legal reserve requirements and the dollar amount of reserves. B) establish maximum and minimum interest rates on bank loans and deposits made with banks. C) oversee the lending criteria banks use. D) suspend the charter of banks whose lending activities contribute to an excessive rate of increase in the money supply.
Suppose that a price-discriminating monopolist divides its market into two segments. The firm will charge the lower price in the market segment where consumers
a. have relatively less elastic demand b. have relatively more elastic demand c. attach a higher marginal value to each unit of the good d. have perfectly inelastic demand e. attach higher average value to units of the good
Which of the following statements about international trade restrictions is true?
a. They ensure that only efficient producers survive. b. They ensure that countries specialize only in those products that they can produce most efficiently. c. In the majority of cases, they harm domestic consumers. d. They typically benefit foreign producers at the expense of domestic consumers. e. They ensure that higher-quality goods are provided at lower prices.