Suppose that you know a good is a normal good for a consumer. Which of the following can you then conclude to be true:
A. The own-price elasticity of demand is less than -1.
B. The income elasticity of demand is greater than 0.
C. The own-price elasticity of demand is greater than -1.
D. The income elasticity of demand is less than 0.
E. Both (a) and (b).
F. Both (a) and (d).
G. Both (b) and (c).
H. None of the above.
Answer: B
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Indicate whether the statement is true or false
Initially the two vendors set up at the ¼ -mile mark and the ¾-mile mark in order for each to minimize its transportation costs. Eventually they both locate at the ½-mile mark. Which of the following statements is true?
a. Both vendors raised their transportation costs by moving to the center.
b. The initial setup is the Nash equilibrium.
c. The initial setup is a stable equilibrium.
d. Vendor A lowered its transportation costs by moving to the center.
If M is $400, P is $4, and Q is 300, then V must be:
A. 1.33. B. 3. C. 5.33. D. 100.
If the graph shown represents Suzi's budget constraint, what can be said about hairbands?
A. They cost half as much as earrings. B. Suzi likes hairbands more than earrings. C. Suzi is willing to pay twice as much for hairbands. D. They cost twice as much as earrings.