A 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a service. This service is a(n) __________ good and demand is __________
a. normal; elastic
b. normal; inelastic
c. normal; unit elastic
d. inferior; elastic
e. inferior; inelastic
D
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The above table depicts prices, quantities, and marginal costs faced by the campus bookstore. Based on marginal analysis, what is the profit-maximizing level of output for the bookstore?
A) 1 book B) 2 books C) 3 books D) 4 books
In the above figure, what happens to the firm's optimal level of output if the price it receives for its product increases from P2 to P3?
A) Output stays the same. B) Output decreases. C) Output increases. D) There is not enough information provided to know what happens to output.
Firms are willing to change the aggregate quantity of output supplied based on price in:
A. the short run only. B. the long run only. C. both the short and long run. D. Price does not affect the quantity that firms supply.
If the price of hamburger increases, the substitution effect works to
a. decrease the quantity of hamburger supplied. b. increase the number of hamburger buns demanded. c. decrease the quantity of hamburger demanded. d. increase the number of hamburger buns supplied.