You would expect the demand for food to be more inelastic than the demand for cookies
Indicate whether the statement is true or false
T
You might also like to view...
A production possibilities frontier shows
A) the various combinations of output a nation can produce a certain time, given its available resources and technology. B) the limits to future growth of a nation. C) how money can be allocated among two kinds of goods. D) that if price of one good decreases, the price of the other has to increase. E) that it is impossible to produce inefficiently.
If the income elasticity of demand for a good is negative, this means that:
a. only the poor will buy the good. b. as incomes fall, less will be spent on the good. c. as incomes rise, the demand for the good will fall. d. the good does not obey the law of demand.
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and real GDP rises. b. The real risk-free interest rate rises, and real GDP remains the same. c. The real risk-free interest rate falls, and real GDP remains the same. d. The real risk-free interest rate and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Given that income is $750 and PX = $32 and PY = $8, what is the market rate of substitution between goods X and Y?
A. -3 B. -4 C. -0.75 D. -25