Suppose a consumer has the following rule of thumb: Regardless of how gasoline prices fluctuate, she will always buy $20 of gasoline per week and then adjust her driving patterns accordingly. We can then conclude the following:
A. Her own-price elasticity of demand is equal to -1.
B. Her income-elasticity of demand is 0.
C. Her own-price elasticity is 0.
D. Her income elasticity of demand is -1.
E. Both (a) and (b).
F. Both (a) and (d).
G. Both (c) and (d)
H. None of the above.
Answer: A
You might also like to view...
A recession causes
a. transfer payments and corporate profits to increase b. military spending and corporate profits to increase c. unemployment to increase and transfer payments to decrease d. transfer payments to increase and corporate profits to decrease e. household income and government transfer payments to decrease
In the analysis of potential GDP, labor and capital are considered
A. inputs. B. final goods and services. C. byproducts of economic growth. D. outputs.
The domestic demand and supply for sugar are Qd = 40,000 ? 200P and QSD = 10,000 + 300P. The foreign supply is QSF = 20,000 + 100P. What is the total supply of sugar in the domestic market?
A. Q = 15,000 + 200P B. Q = 10,000 + 300P C. Q = 50,000 + 100P D. Q = 30,000 + 400P
The best price index to use in calculating real GDP is
A. The PPI. B. The CPI. C. Any of the indexes because they all reflect price level changes. D. The GDP deflator.