Luxury goods have income elasticity:
A) of less than zero.
B) between zero and one.
C) equal to one.
D) greater than one.
D
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In the above figure, if the economy is at equilibrium at E1, the Fed would most likely
A) attempt to lower the aggregate demand in the economy. B) attempt to lower the price level below 120. C) adopt an expansionary monetary policy. D) adopt a contractionary monetary policy.
Piece rates are practical when
A) individual output can be easily measured. B) the quantity of the work is of much less importance than quality. C) both employees and employers engage in opportunistic behavior. D) All of the above.
An antitrust agency is identifying the product market for Good X and determines that Good X and Good Y have a cross-price elasticity of 0.01. As a result of the cross-price elasticity, the antitrust agency is likely to ________ Good Y from Good X's product market as the products ________ compete as close substitutes.
A) exclude; do B) include; do C) exclude; do not D) include; do not
When the price of a complement (cream) decreases, the demand for the related good (coffee)
A) will fall. B) remains constant. C) will shift outward. D) will shift inward.