The burden of a tax is shifted toward buyers if:
Demand is perfectly elastic.
Demand is relatively more elastic than supply.
Demand is relatively more inelastic than supply.
Demand and supply have equal elasticities.
We know that the demand for a product is elastic if:
When price rises, revenue rises
When price rises, revenue falls
When price rises, quantity demanded rises
When price falls, quantity demanded rises
A partial explanation for the inverse relationship between priceand quantity demanded is that a:
Lower price shifts the supply curve to the left
Higher price shifts the demand curve to the left
Lower price shifts the demand curve to the right
Higher price reduces the real incomes of buyers
A person with a diminishing marginal utility of income:
Will be risk averse.
Will be risk neutral.
Will be risk loving.
Cannot decide without more information.
The demand for chicken is downward-sloping. Suddenly the price ofchicken rises from $130 per kilo to $140 per kilo. This willcause:
The demand curve to shift to the left
The demand curve to shift to the right
Quantity demanded to increase
Quantity demanded to decrease
A normative economic statement:
Is a statement of fact.
Is a hypothesis used to test economic theory.
Is a statement of what ought to be, not what is.
Is a statement of what will occur if certain assumptions aretrue.
A new technology which reduces costs for firms':
Select correct option:
Shifts the supply curve to the right
Shifts the supply curve to the left
Reduces the equilibrium quantity
Raises the equilibrium price
What happens in the market for airline travel when the price oftraveling by rail decreases?
The demand curve shifts left.
The demand curve shifts right.
The supply curve shifts left.
The supply curve shifts right.
The condition for consumer equilibrium (in the allocation ofexpenditure among competing goods:
Can be expressed as marginal utility per dollar spent on each goodbeing equalized across all goods.
Can be expressed as the ratio of (marginal utility per unit of thegood)/(price per unit of the good) being equalized across all goods.
Can be expressed as the ratio of marginal utilities being equatedto the ratio of prices for all possible pairs of goods.
All of the given option.
If consumer incomes increase, the demand for product Y:
Will necessarily remain unchanged
Will shift to the right if Y is a complementary good
Will shift to the right if Y is a normal good
Will shift to the right if Y is an inferior good