Question

1) When income is $100 per week, 10 units of good X are demanded. When income is $150 per week, 15 units of good X are demanded. The income elasticity of demand of good X equals to

1. 11/5
2. 5/11
3. 1
4. 10/15
5. 100/150

2) If goods X and Y are substitutes, then the cross elasticity of demand will be

1. positive
2. negative
3. zero
4. greater than 1
5. greater than zero but less than 1

3) When the price of silver rises, there will be

1. no change in quantity demanded
2. supply and demand will interact accordingly
3. a movement along the good's supply curve
4. both an outward shift in the demand for the good and a movement along the good's demand curve
5. an outward shift in the demand for the good

4) When price is $5 per unit, quantity demanded is 12 units. When price is $8 per unit, quantity demanded is 6 units. The value of the price elasticity of demand is approximately (before taking absolute value)

1. -4
2. -13/9
3. -20/11
4. -11/5
5. -4/11

5) The demand curve for petroleum (oil refinery) should be

1. perfect inelastic in the short run
2. more or less elastic depending upon supply conditions
3. less elastic in the long run than in the short run
4. more elastic in the long run than in the short run
5. elastic in the long run as it is in the short run

Answer 1