Biology Forums - Study Force

Farm income has fallen in part because demand for farm products is price inelastic and income inelastic.
 a. True
  b. False

QUESTION 2

Luxury goods are
 a. price inelastic
  b. income inelastic
  c. income elastic
  d. goods with negative income elasticity
  e. goods with positive price elasticity

QUESTION 3

An inferior good is one for which demand increases as
 a. price decreases
  b. price increases
  c. income increases
  d. income decreases
  e. the price of a related good decreases

QUESTION 4

Economists distinguish between normal and inferior goods using
 a. price elasticity of demand
  b. price elasticity of supply
  c. income elasticity of demand
  d. cross-price elasticity of demand
  e. tax incidence

QUESTION 5

If the income elasticity of demand for a service is 0.6, then a 5 percent increase in income will generate a __________ in quantity demanded
 a. 3 percent decrease
  b. 3 percent increase
  c. 8.33 percent decrease
  d. 8.33 percent increase
  e. 0.12 percent decrease

QUESTION 6

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

QUESTION 7

If a good is inferior, then the income elasticity of demand for that good is
 a. positive and greater than 1
  b. negative
  c. positive and less than 1
  d. 0
  e. perfectly elastic

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