Question

In: Economics

1) Suppose that income increases and buyers demand less of this good. This is a(n) -----...

1) Suppose that income increases and buyers demand less of this good. This is a(n) ----- good.

  1. normal
  2. luxury
  3. inferior
  4. laconic

2) Initially a market is in equilibrium. Then sellers anticipate a lower price in the future for this good, and at the same time the price of a substitute for this good increased, and demand shifts less than supply. As a result the equilibrium price ----- and the equilibrium quantity -----.

  1. rises, rises
  2. rises, falls
  3. falls, rises
  4. falls, falls

3) Let inverse demand be P = 12 - Q, and inverse supply be P = 2 + 3Q. The equilibrium price is __________

Solutions

Expert Solution


Related Solutions

A tax on a good A. gives buyers an incentive to buy less of the good...
A tax on a good A. gives buyers an incentive to buy less of the good than they otherwise would buy. B. gives sellers an incentive to produce less of the good than they otherwise would produce. C. creates a benefit to the government, the size of which exceeds the loss in total surplus to buyers and sellers. D. All of the above are correct. E. A and B, only When a tax is levied on sellers of a good,...
If the demand for good A increases when the price of good B increases​, then goods...
If the demand for good A increases when the price of good B increases​, then goods A and B are A. unrelated goods. B. complements. C. substitutes. D. There is not enough information to make a determination.
Suppose income elasticity of demand is equal to 2.0 a. If income increases by 10%, Quantity...
Suppose income elasticity of demand is equal to 2.0 a. If income increases by 10%, Quantity Demanded will ____ by ___% b. The demand is income ____ because the coefficient is _____1. c. Since the income elasticity is ____, buyers view this good as a(n) ____ good. d. As income increases, demand for this good will ___; as income increases, the demand curve will shift to the ____.
The law of demand states that as the price of a good rises, A. buyers purchase...
The law of demand states that as the price of a good rises, A. buyers purchase more of the good, because they expect prices to be even higher in the future B. buyers purchase less of the good, because they expect prices to fall in the future C. buyers purchase less of the good, because their real income decreases with an increase in price D. buyers purchase more of the good, because the price of a substitute has risen Pl...
Consider the market for a good in which there are two income groups of buyers. There...
Consider the market for a good in which there are two income groups of buyers. There are 10 buyers with income $28 and 8 buyers with income $36. All buyers have the same utility function u = 16q − q2 + m, where q denotes the amount of the good and m the money left after buying the good. Denote the price of the good by p. (a) For each income group, determine the individual demand of a buyer. (b)...
Consider the market for a good in which there are two income groups of buyers. There...
Consider the market for a good in which there are two income groups of buyers. There are 8 buyers with income $40 and 6 buyers with income $54. All buyers have the same utility function u = 20q − q2 + m, where q denotes the amount of the good and m the money left after buying the good. Denote the price of the good by p. (a) For each income group, determine the individual demand of a buyer. (b)...
Consider the market for a good in which there are two income groups of buyers. There...
Consider the market for a good in which there are two income groups of buyers. There are 8 buyers with income $40 and 6 buyers with income $54. All buyers have the same utility function u = 20q − q 2 + m, where q denotes the amount of the good and m the money left after buying the good. Denote the price of the good by p. (a) [5 points] For each income group, determine the individual demand of...
An inferior good: a.has a price elasticity of demand less than negative one b.has an income...
An inferior good: a.has a price elasticity of demand less than negative one b.has an income elasticity of demand less than one c.has an income elasticity of demand less than zero d.is the same as a necessity An underlying assumption in development of indifference curves is that consumers a.can rank alternative consumption bundles b.have tastes that change along a given indifference curve c.prefer less to more d.none of the above The marginal rate of substitution is: Group of answer choices...
Suppose the incomes of buyers in a market for a particular normal good decrease and there...
Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. Graphically show what happens to the demand and supply curve, and comment on what would happen to the equilibrium price and quantity in this market. Please label all parts of your graph to receive full points.
Two goods are _____________ if their cross-price elasticity is 0.5. A good is a(n) ______ good if its income elasticity of demand is 0.5.
Two goods are _____________ if their cross-price elasticity is 0.5. A good is a(n) ______ good if its income elasticity of demand is 0.5.Group of answer choices:Weak substitutes: NecessityClose substitutes: LuxuryWeak complements: NormalClose complements: Inferior
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT