A negative income elasticity of demand indicates that the product
A. is a complementary good.
B. is an inferior good.
C. is a normal good.
D. is a substitute good.
Answer: B
You might also like to view...
Which of the following is a difference between a perfectly competitive market and a monopoly?
A) There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly. B) The sellers in a perfectly competitive market are price makers, while a seller in a monopoly market is a price taker. C) The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue. D) The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.
If the market price is $5 and you are currently producing at a level where average total cost is $3 and falling, you should:
a. b or c, it doesn't matter. b. shut down. c. produce only enough to cover variable costs. d. produce where MR = MC. e. produce until the average total cost and average revenue are equal.
The adaptive expectations hypothesis implies that people:
a. adjust their expectations quickly to policy changes. b. expect the next period to be pretty much like the recent past. c. will always be correct in their forecast for the next period. d. change their expectations about the future if policy changes.
When the rate of growth of per capita income of poorer countries is higher than that of richer countries, it leads to economic convergence
a. True b. False Indicate whether the statement is true or false