The price elasticity of demand for business air travel is -.80 and the price elasticity of demand for leisure air travel is -1.60. Therefore, the demand for leisure air travel
A. is unrelated to consumers' incomes.
B. is more elastic than the demand for business travel.
C. is less elastic than the demand for business travel.
D. is inelastic.
Answer: B
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Pizza is a normal good. Which figure above shows the effect of a decrease in consumers' incomes?
A) Figure A B) Figure B C) Figure C D) Figure D E) Both Figure B and Figure C
Membership in the Federal Reserve System
A) is held by state-owned banks only. B) is held collectively by all banks in the banking system. C) is held by only a minority of banks in the banking system. D) is held by banks that also have branches outside the United States.
One of the problems associated with the utilitarianism is that it does not recognize that
A) taxing those with higher incomes results in less work effort. B) each individual receives a different marginal benefit from a dollar's worth of income. C) equity is achieved when there is no poor and no rich. D) similar individuals should be treated the same.
If stock prices follow a random walk,
a. speculation in the stock market destabilizes prices. b. a stock's past performance is not a good indicator of its future performance. c. rumors, news, and other "signals" have no effect on stock prices. d. the stock market does not participate in channeling resources toward firms with high stock prices.