# ECO 101 - When the cross-price elasticity of demand

Question # 00633737 Posted By: dr.tony Updated on: 01/04/2018 05:07 AM Due on: 01/04/2018
Subject Economics Topic Microeconomics Tutorials:
Question
QUESTION 1
1. When the cross-price elasticity of demand is a large positive number, one can correctly conclude that
2. A.the goods are normal goods.
3. B.the goods are inferior goods.
4. C.the goods are substitutes.
5. D.the goods are complements.
6. E.total revenue will increase when the price increases.

QUESTION 2
1. When two goods are substitutes, we expect their cross-price elasticity of demand to:
2. A.be positive.
3. B.be negative.
4. C.be zero.
5. D.be greater than 1.

QUESTION 3
1. If the cross-price elasticity of two goods is 0.25, then we know that:
2. A.those goods are substitutes because their elasticity is greater than zero.
3. B.those goods are complements because their elasticity is less than 1.
4. C.those goods are substitutes because their elasticity is less than 1.
5. D.those goods are complements because their elasticity is greater than zero.

QUESTION 4
1. If the cross-price elasticity of demand for goods X and Y is zero, it would imply that
2. A.price elasticity of demand for X is zero.
3. B.price elasticity of demand for Y is zero.
4. C.X and Y are unrelated.
5. D.X and Y are substitutes.
6. E.X and Y are complements.

QUESTION 5
1. If a 10 percent increase in the price of good Y brings forth a 25 percent increase in the quantity demanded of good X, then the cross-price elasticity of demand is equal to ________ , and good Y and good X are ________.
2. A.2.5; substitutes
3. B.0.4; substitutes
4. C.unit-elastic; not related
5. D.0.4; complements
6. E.2.5; complements

QUESTION 6
1. The cross-price elasticity of demand for peanut butter and jelly is likely:
2. A.a negative number.
3. B.a positive number.
4. C.a very high positive number.
5. D.1.

QUESTION 7
1. It is most likely for which of the following to have an income elasticity greater than 1?
2. A.Deli meat
3. B.Store brand cola
4. C.Gold earrings
5. D.Milk

QUESTION 8

Quantity Purchased

Income Automobiles Coffee Margarine

\$25,000 2 10 1

\$50,000 3 8 3

In the table above, coffee is found to be

A.an inferior good.

B.an aggressive good.

C.a normal good.

D.a negative good.

E. conspicuous consumption good.

QUESTION 9
1. If a 10 percent increase in income results in a 50 percent decline in the quantity of potatoes purchased, other things being equal, then potatoes are
2. A.a complement good.
3. B.a substitute good.
4. C.an inferior good.
5. D.a normal good.
6. E.a luxury good.

QUESTION 10
1. Which of the following is most likely to have an income elasticity between 0 and 1?
2. A.European vacation
3. B.Store brand cola
4. C.Milk
5. D.Frappuccino

QUESTION 11
1. It is most likely for ______________ to have an income elasticity less than 1, and _____________ to have an income elasticity of more than one.
2. A.coffee; boat
3. B.boat; car
4. C.vacation; cell phone
5. D.filet mignon; chicken

QUESTION 12
1. If butter has an income elasticity equal to 0.75, then butter is an inferior good.
2. A.True
3. B.False

QUESTION 13

Alteratives      Good X    Good X

A                 0             72

B                30            70

C                50            65

D                60            40

E                 64              0

Using the table above, the production of 25 units of good X and 60 units of good Y is:

A.not feasible given current resources and technology.

B.feasible, but would occur only if there were either unemployed or underemployed resources.

C.possible only if economic growth occurs.

D.None of the above is correct.

QUESTION 14

Alteratives Good X Good X

A 0 72

B 30 70

C 50 65

D 60 40

E 64 0

Using the table above, it can be seen that the production of 40 units of good X and 80 units of good Y is:

A.not feasible given current resources and technology.

B.feasible, but would only occur if there were unemployed or underemployed resources.

C.possible with existing resources if efficient production takes place.

D.None of the above is correct.

QUESTION 15
1. Suppose sales of a product depend directly on economic growth. If producers of that product expect an economic recession in the near future, there is likely to be
2. A.a rightward shift of the supply curve.
3. B.a movement to the left along the supply curve.
4. C.a leftward shift of the supply curve.
5. D.a movement to the right along the supply curve.
6. E.None of these.
QUESTION 16
1. An increase in a product supply curve might be caused by
2. A.some firms entering an industry.
3. B.an increase in the price of an input (resource).
4. C.an increase in the price of the product.
5. D.a decrease in consumer incomes.
6. E.some firms leaving an industry.
QUESTION 17
1. Assume the supply curve of sirloin steak is upward sloping. If the price increases from \$4.25 to \$8.60 per pound,
2. A.the supply of sirloin steak will rise.
3. B.a greater quantity of sirloin steak will be supplied.
4. C.a small quantity of sirloin steak will be supplied.
5. D.the demand for sirloin steak will decrease.
6. E.the supply of sirloin steak will decrease.
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1. ## Solution: ECO 101 - When the cross-price elasticity of demand

Tutorial # 00632553 Posted By: dr.tony Posted on: 01/04/2018 05:08 AM
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