Sandra consumes two goods–tea and coffee. Her demand for tea is inelastic while her demand for coffee is elastic. If there is an increase in the price of both tea and coffee, ________
A) Sandra's expenditure on both tea and coffee is likely to increase
B) Sandra's revenue on both tea and coffee is likely to decrease
C) Sandra's expenditure on tea will increase and her expenditure on coffee will decrease
D) Sandra's expenditure on coffee will increase and her expenditure on tea will decrease
C
You might also like to view...
Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately?
A) The demand for bottled water decreases. B) The demand for bottled water increases. C) The quantity of bottled water demanded increases. D) The quantity of bottled water demanded decreases. E) None of the above answers is correct because it is the supply that immediately changes, not the demand.
In order for a patent to be considered useful, it must meet which of the two criteria?
A) It serves some minimal human need and has a downward sloping demand curve. B) It works as intended and serves some minimal human need. C) It minimally works as intended. D) It works as intended and has downward sloping demand curve.
The elasticity of labor demand does not depend on the:
A. elasticity of demand for the firm's product. B. elasticity of labor supply. C. possibility of and cost of substitution in production. D. relative importance of the factor in the production process.
In a monopolistically competitive market, how do we model the firm's slight control over the price that they charge?
A. The demand curve is downward sloping and very elastic. B. The demand curve is downward sloping and very inelastic. C. The ATC is relatively flat. D. The AVC is horizontal.