All normal goods have
A) income elasticities of demand greater than 1.0.
B) price elasticities of demand greater than 1.0.
C) negative price elasticities of demand.
D) positive income elasticities of demand.
D
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All else equal, the price elasticity of demand for a good tends to be lower:
A. in the long run. B. if the good has many close substitutes. C. if the good represents a large share of a consumer's budget. D. if the good has few close substitutes.
The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement.
For Bagel World, ________ is a ________.
A. cheating on the agreement; dominated strategy B. abiding by the agreement; dominant strategy when Bagels'R'Us also abides C. cheating on the agreement; dominant strategy D. abiding by the agreement; dominant strategy
Suppose it is discovered that consumption of chocolate leads to a longer life. This information would lead to
A) an increase in quantity demanded of chocolate. B) an increase in demand for chocolate. C) a decrease in quantity demanded of chocolate. D) a decrease in demand for chocolate.
If the price of a good rises by 10% and the percentage decrease in the total amount consumers spend on the good is 15%, then the good is
A. perfectly inelastic. B. unit elastic. C. elastic. D. inelastic.