Demand for a necessity, such as food, is
a. both income and price inelastic
b. income inelastic and price elastic
c. income elastic and price inelastic
d. both income and price elastic
e. income elastic and perfectly price inelastic
A
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When a negative externality exists, the private market produces
A) products at a low opportunity cost. B) less than the economically efficient output level. C) products at a high opportunity cost. D) more than the economically efficient output level.
In the simple linear regression model, the regression slope
A) indicates by how many percent Y increases, given a one percent increase in X. B) when multiplied with the explanatory variable will give you the predicted Y. C) indicates by how many units Y increases, given a one unit increase in X. D) represents the elasticity of Y on X.
Which of the following is a determinant of the price elasticity of demand for an item?
A) the availability of a close substitute for the item B) the percentage of a consumers budget allocated to expenditures on the item C) the amount of time available to adjust to a change in the price of the item D) All of the above are correct.
A tax that fell very heavily on the rich and the upper middle class might shift the Lorenz curve from
A. J to K.
B. K to L.
C. L to K.
D. I to J.