If the income elasticity for lobster is 0.6, a 25 percent increase in income will lead to a:
A. 15 percent increase in demand for lobster.
B. 2.4 percent increase in demand for lobster.
C. 6 percent drop in demand for lobster.
D. 42 percent increase in demand for lobster.
Answer: A
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A. inelastic. B. unit elastic. C. elastic. D. perfectly elastic.
Market structure is determined mainly by the size of firms
Indicate whether the statement is true or false
When the interest rate on newly issued bonds increases, the price of existing bonds:
A. decreases. B. may either increase or decrease. C. increases. D. increases only if the coupon rate is below the new rate.
The slope of a curve measures:
A. the change in the vertical variable in response to the change in the horizontal variable. B. the length of the curve. C. only the change in the horizontal variable. D. only the change in the vertical variable.