If the income elasticity of demand for corn is 0.5, then as income increases :

If the income elasticity of demand for corn is 0.5, then as income increases

A) the demand for corn will increase.
B) the demand for corn will decrease.
C) corn will prove to be an inferior good.
D) the supply curve of corn will shift leftward.

Ques. 2

Monopolies can make an economic profit in the long run because of

A) rent seeking by competitors.
B) the elastic demand for the monopoly's product.
C) the cost-savings gained by the monopoly.
D) barriers to enter the monopoly's market.

Ques. 3

In the table above, y is measured along the y-axis and x along the x-axis. The slope of the relationship between x = 0 and x = 2 is

A) -6.
B) 2.
C) 3.
D) 6.

Ques. 4

The quantity theory of money asserts that inflation is the result of growth in

A) the quantity of money.
B) potential GDP.
C) the natural rate of unemployment.
D) money wage rates.

Ques. 5

Consider the perfectly competitive firm in the above figure. At the profit maximizing level of output, the firm is

A) incurring an economic loss equal to 119.00.
B) incurring an economic loss equal to 123.50.
C) incurring an economic loss equal to 187.00.
D) making zero economic profit.

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If the income elasticity of demand for corn is 0.5, then as income increases :

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