.

(02.05 LC)

Which of the following is essential to measure the elasticity of supply? (5 points)

A percentage change in quantity

The price of the good

The particular unit of measurement for the good in question

A complete schedule for every possible combination of price and quantity

Whether the good is normal or inferior

2.

(02.05 MC)

An increase in the price of Good A by 20 percent results in a decrease in the quantity demanded of Good B by 2 percent. Goods A and B (5 points)

are complements with a cross-price elasticity of demand of 0.1

are unrelated goods

are substitutes with a cross-price elasticity of demand of 40

are complements with a cross-price elasticity of demand of 10

are substitutes with a cross-price elasticity of demand of 10

3.

(02.05 MC)

Which statement is true if the quantity demanded of a good decreases by 10% while consumer incomes increase by 2%? (5 points)

The income elasticity of demand is 20, and the good is inferior.

The income elasticity of demand is 5, and the good is inferior.

The income elasticity of demand is 0.2, and the good is normal.

The income elasticity of demand is 5, and the good is inferior.

The income elasticity of demand is 20, and the good is normal.

4.

(02.05 LC)

Average consumer income increases by 5%. Which of the following must be true for a normal good? (5 points)

The demand for the good increases by 5%.

The demand for the good decreases.

The demand for the good does not change.

The quantity demanded for the good increases.

The quantity demanded for the good decreases.

5.

(02.05 MC)

If the cross-price elasticity of demand between goods X and Y is 1, which of the following must be true? (5 points)

Both goods have unit elastic supply.

An increase in the price of good X leads to a decrease in the quantity demanded of good Y.

They are substitutes.

A percent change in the price of good X is matched by an equal change in the price of good Y.

They are both normal goods.