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Suppose the cross-price elasticity of demand for butter and margarine is equal to
0.96 but the cross price elasticity for water and lemons is –0.13. This means that
butter and margarine are ________ while water and lemons are ________.
Answer complements; substitutes
194. Multiple Choice: Suppose the cross-price elasticity be...
Question Suppose the cross-price elasticity between demand for Burger King burgers and
the price of McDonald's burgers is 0.8. If McDonald's increases the price of its
burgers by 10%, then:
Answer Burger King will sell 10% more burgers.
195. Multiple Choice: Suppose the price of cereal rose by 2...
Question Suppose the price of cereal rose by 25% and the quantity of milk sold decreased
by 50%. We know that the:
cross-price elasticity of demand for milk is 2.
196. Multiple Choice: If two goods are substitutes, their c...
Question If two goods are substitutes, their cross-price elasticity of demand should be:
Answer less than 0.
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197. Multiple Choice: If two goods are complements, their c...
Question If two goods are complements, their cross-price elasticity of demand should be:
198. Multiple Choice: If the price of chocolate-covered pea...
Question If the price of chocolate-covered peanuts increases and the demand for strawberry
licorice twists increases, this indicates that these two goods are:
Answer complementary goods.
199. Multiple Choice: The pair of items that is likely to h...
Question The pair of items that is likely to have the largest positive cross-price elasticity of
demand is:
200. Multiple Choice: The cross-price elasticity of demand ...
Question The cross-price elasticity of demand of complementary goods is:
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201. Multiple Choice: If the price of chocolate-covered pea...
Question If the price of chocolate-covered peanuts increases and the demand for strawberry-
flavored soft drinks decreases, this indicates that these two goods are:
Answer unrelated goods.
202. Multiple Choice: The pair of items that is most likely...
Question The pair of items that is most likely to have a negative cross-price elasticity of
demand is:
Answer aspirin and hamburgers.
203. Multiple Choice: If your purchases of shoes increase f...
Question If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when
the price of shirts increases from $8 to $12, for you, shoes and shirts are
considered:
Answer inferior goods.
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204. Multiple Choice: If your purchases of shoes decrease f...
Question If your purchases of shoes decrease from 11 pairs per year to 9 pairs per year
when the price of shirts increases from $8 to $12, for you, shoes and shirts are
considered:
Answer inferior goods.
205. Multiple Choice: If your purchases of shoes remain con...
Question If your purchases of shoes remain constant at 9 pairs per year when the price of
shirts increases from $8 to $12, for you, shoes and shirts are considered:
Answer inferior goods.
206. Multiple Choice: The cross-price elasticity of demand ...
Question The cross-price elasticity of demand for Coke with respect to the price of Pepsi has
been estimated to be 0.61. If the price of Pepsi falls by 10% in a period, how will
that affect the demand for Coke in that period, all other things unchanged?
Answer The demand for Coke will decrease but by less than 6.1%.
207. Multiple Choice: Suppose that the cross-price elastici...
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Question Suppose that the cross-price elasticity of demand for Mountain Dew with respect to
the price of Coke is 0.7. This implies that the two goods are:
normal.
208. Multiple Choice: Which of the following pairs of goods...
Question Which of the following pairs of goods are most likely to have a cross-price elasticity
of demand that is greater than zero?
Answer shoes and shoelaces
209. Multiple Choice: If you know the cross-price elasticit...
Question If you know the cross-price elasticity between two goods is positive, then you know
the two goods are:
210. Multiple Choice: Raina consumes 100% more mechanical p...
Question Raina consumes 100% more mechanical pencils when the price of felt-tip pens
increases by 50%. For Raina, pencils and pens are ________, and the cross-price
elasticity of demand is ________.
Answer complements; 1/2
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211. Multiple Choice: Goods are ________ when the cross-pri...
Question Goods are ________ when the cross-price elasticity of demand is positive and
inelastic; elastic
212. Multiple Choice: The percentage change in quantity dem...
Question The percentage change in quantity demanded of one good or service divided by the
percentage change in the price of a related good or service is the:
Answer price elasticity of demand.
213. Multiple Choice: If two goods are substitutes, their c...
Question If two goods are substitutes, their cross-price elasticity of demand should be:
Answer less than 0.
214. Multiple Choice: If two goods are complements, their c...
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Question If two goods are complements, their cross-price elasticity of demand should be:
greater than 0.
215. Multiple Choice: The cross-price elasticity of demand ...
Question The cross-price elasticity of demand of substitute goods is:
Answer between –1 and 0.
216. Multiple Choice: Since the price of walnuts increases ...
Question Since the price of walnuts increases as the demand for cashews increases, we
can assume that these two goods are:
Answer unrelated goods.
217. Multiple Choice: The pair of items that is likely to h...
Question The pair of items that is likely to have the highest cross-price elasticity of demand
is:
Answer baseball and baseball glove.
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218. Multiple Choice: If two goods are complementary, we ca...
Question If two goods are complementary, we can assume that the cross-price elasticity of
demand for these goods is:
Answer between 0 and 1.
219. Multiple Choice: We note that the price of pretzels in...
Question We note that the price of pretzels increases and the demand for tortilla chips
decreases, so we can assume that these two goods are:
Answer unrelated goods.
220. Multiple Choice: The pair of items that is most likely...
Question The pair of items that is most likely to have a negative cross-price elasticity of
demand is:
Answer cashews and peanuts.
221. Multiple Choice: The percent change in quantity demand...
Question The percent change in quantity demanded divided by the percent change in
income, all other things unchanged, is:
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Answer price elasticity of demand.
222. Multiple Choice: If the income elasticity of demand fo...
Question If the income elasticity of demand for a good is positive, the good is said to be:
Answer an inferior good.
223. Multiple Choice: The income elasticity of demand of a ...
Question The income elasticity of demand of a normal good is:
Answer between 1 and 0.
224. Multiple Choice: If your income increases and your con...
Question If your income increases and your consumption of bagels increases, other things
equal, bagels are considered:
Answer a negative good.
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225. Multiple Choice: If the income elasticity of demand fo...
Question If the income elasticity of demand for a good is negative, the good is said to be:
a normal good.
226. Multiple Choice: If your purchases of shoes increase f...
Question If your purchases of shoes increase from 9 pairs per year to 11 pairs per year when
your income increases from $19,000 to $21,000 a year, other things equal, for you,
shoes are considered:
a substitute good.
227. Multiple Choice: If your purchases of shoes decrease f...
Question If your purchases of shoes decrease from 11 pairs per year to 9 pairs per year
when your income increases from $19,000 to $21,000 a year, other things equal,
then, for you, shoes are considered:
Answer a normal good.
228. Multiple Choice: The income elasticity of demand for p...
Question The income elasticity of demand for peaches has been estimated to be 1.43. If
income grows by 15% in a period, how will that affect total revenue from peaches in
that period, all other things unchanged?
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229. Multiple Choice: The income elasticity of demand for e...
Question The income elasticity of demand for eggs has been estimated to be 0.57. If income
grows by 5% in a period, how will that affect demand for eggs in that period, all
other things unchanged?
Answer Demand will increase by more than 5.7%.
230. Multiple Choice: Eric's income increased from $40,000 ...
Question Eric's income increased from $40,000 to $50,000 per year. Eric's consumption of
tickets to pro football games increased from two to four per year. Using the
midpoint formula, his income elasticity of demand for pro football game tickets is
equal to ________, and football game tickets are ________ goods.
Answer –1/3; inferior
231. Multiple Choice: Nico rents 10% more DVDs when his inc...
Question Nico rents 10% more DVDs when his income increases by 20%. Based on this
information, we know that:
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the price of DVDs has decreased.
232. Multiple Choice: If I told you that the income elastic...
Question If I told you that the income elasticity for hybrid cars was positive, you would know
that:
Answer there are many substitutes for hybrid cars.
233. Multiple Choice: Kayla and Jada are roommates in New Y...
Question Kayla and Jada are roommates in New York City. Both Kayla and Jada recently
received raises. Kayla now buys more CDs than before, but Jada buys fewer. Kayla
behaves as if CDs are ________ goods, and Jada's income elasticity of demand for
CDs is ________.
Answer normal; positive
234. Multiple Choice: When Joe's income is $100 per week, h...
Question When Joe's income is $100 per week, he spends $20 per week on pizza. When his
income rises to $110 per week, he spends $25 per week on pizza. If the price of
pizza remains constant, this information implies that for Joe:
demand for pizza is price-elastic.
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235. Multiple Choice: Suppose you manage a convenience mart...
Question Suppose you manage a convenience mart and are in charge of ordering products
but do not set the price. The home office provides the prices. In your area, the
income elasticity of demand for peanut butter is –0.5. Due to local factory closings,
you expect local incomes to decrease by 20% on average in the next month. As a
result, you should stock:
Answer 20% more peanut butter on the shelves.
236. Multiple Choice: Reference: Ref 6-16 (Table: Market f...
Question
Reference: Ref 6-16
(Table: Market for Pizza) Look at the table Market for Pizza. In the table, when
income changes from $1,000 to $1,400 per month, the income elasticity of demand
for pizza at a price of $14 per pizza is:
Answer –1.
237. Multiple Choice: Reference: Ref 6-16 (Table: Market f...
Question
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Reference: Ref 6-16
(Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, the
income elasticity of demand at a price of $10 per pizza is:
0.40
238. Multiple Choice: Reference: Ref 6-16 (Table: Market f...
Question
Reference: Ref 6-16
(Table: Market for Pizza) If income changes from $1,000 to $1,400 per month, the
income elasticity of demand at a price of $10 per pizza is:
Answer 0.33
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239. Multiple Choice: Which of the following statements is ...
Question Which of the following statements is true?
Answer When the income elasticity of demand is positive, the good is an inferior good.
240. Multiple Choice: If the income elasticity of demand fo...
Question If the income elasticity of demand for a good is _______, the good is said to be
_________.
Answer positive; inferior good
241. Multiple Choice: For a good to be considered a normal ...
Question For a good to be considered a normal good, the_____ must be ________.
Answer income elasticity of demand; between 1 and 0
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242. Multiple Choice: If your income increases and your con...
Question If your income increases and your consumption of a good increases, then, for you,
that good is considered:
Answer a negative good.
243. Multiple Choice: If the income elasticity of demand fo...
Question If the income elasticity of demand for a good is _______, the good is said to be
_________.
negative; a normal good
244. Multiple Choice: The income elasticity of demand of an...
Question The income elasticity of demand of an inferior good:
cannot be determined.
245. Multiple Choice: Assume that as your income increases,...
Question Assume that as your income increases, your consumption of burgers increases.
We can assume that you consider burgers:
Answer a negative good.
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246. Multiple Choice: If the consumption of a certain good ...
Question If the consumption of a certain good increases when income decreases, that good
is considered:
Answer a substitute good.
247. Multiple Choice: The income elasticity of demand measu...
Question The income elasticity of demand measures:
Answer how much the quantity demanded changes in response to a price change.
248. Multiple Choice: If an increase in income leads to a d...
Question If an increase in income leads to a decrease in the demand for a good, then the
good is said to be:
Answer normal.
249. Multiple Choice: If an increase in income leads to an ...
Question
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If an increase in income leads to an increase in the demand for a good, then the
good is said to be:
a staple or necessity.
250. Multiple Choice: For a normal good, the income elastic...
Question For a normal good, the income elasticity of demand will be:
Answer negative.
251. Multiple Choice: For an inferior good, the income elas...
Question For an inferior good, the income elasticity of demand will be:
determined by the direction of the change in income.
252. Multiple Choice: Reference: Ref 6-17 (Table: Johnson'...
Question
Reference: Ref 6-17
(Table: Johnson's Income and Expenditures) Look at the table Johnson's Income
and Expenditures. Johnson's income elasticity of demand for steaks is:
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Answer greater than 1.
253. Multiple Choice: Reference: Ref 6-17 (Table: Johnson'...
Question
Reference: Ref 6-17
(Table: Johnson's Income and Expenditures) Look again at the table Johnson's
Income and Expenditures. Johnson's income elasticity of demand for magazines
is:
Answer negative.
254. Multiple Choice: Reference: Ref 6-17 (Table: Johnson'...
Question
Reference: Ref 6-17
(Table: Johnson's Income and Expenditures) Look again at the table Johnson's
Income and Expenditures. For Johnson, magazines are:
Answer a negative good.
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a neutral good.
255. Multiple Choice: Reference: Ref 6-17 (Table: Johnson'...
Question
Reference: Ref 6-17
(Table: Johnson's Income and Expenditures) Look again at the table Johnson's
Income and Expenditures. Johnson's income elasticity of demand for movies is:
Answer infinite.
256. Multiple Choice: Reference: Ref 6-17 (Table: Johnson'...
Question
Reference: Ref 6-17
(Table: Johnson's Income and Expenditures) Look at the table Johnson's Income
and Expenditures. Johnson's income elasticity of demand for pizzas is:
Answer –1.4.
257. Multiple Choice: Reference: Ref 6-17 (Table: Johnson'...
Points: 0
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