1. Assume a consumer finds their total expenditure on burritos increases by 20% after the price of burritos declines by 20%. Which of the following is true? a. The consumers demand for burritos is unit elastic b. The consumers demand for burritos is relatively elastic c. The consumers demand for burritos is relatively inelastic d. The consumers demand for burritos is perfectly elastic e. Burritos are inferior goods to this consumer 2. Assume the income elasticity of demand for good Z equals -5.0. Which of the following is true? A. Good Z is a normal good. b. Good Z must have an inelastic demand. c. An increase in income will lead to a decrease in demand. D. An increase in income will lead to an increase in demand. e. The income effect of a price increase will be a decrease in quantity demanded at every price. 3. If the demand for a drug is price inelastic, a 5 percent increase in the price of the drug will a. have no effect on the total revenue of the drug producers b. decrease the total spending on the drug by consumers C. cause the demand for the drug to be less elastic d. increase the total revenue of the drug producers e. decrease the total revenue of the drug producers 4. A 10% increase in Sandra's income causes Sandra's consumption of soda to decrease from 10 cans to 6 cans per week. Sandra's income elasticity of demand for soda is: A. greater than zero and therefore soda is a necessity B. greater than zero and therefore soda is a normal good C. less than zero and therefore soda is a normal good D. less than zero and therefore soda is an inferior good E. greater than one and therefore soda is a necessity 5. Assume that a 20% increase in the price of sliced turkey causes a 50% decrease in the quantity demanded for sliced cheese. What is the cross-price elasticity of demand, and how are these goods related? A. Cross-price elasticity of demand is -0.4 and these goods are complements. B. Cross-price elasticity of demand is +0.4 and these goods are substitutes. C. Cross-price elasticity of demand is -0.4 and these goods are substitutes. D. Cross-price elasticity of demand is +2.5 and these goods are substitutes. E. Cross-price elasticity of demand is -2.5 and these goods are complements. 6. Josephine is buying candy and gum. If she is maximizing her utility for the combination of candy and gum she buys, which of the following must hold? a. Total utility of candy/price of candy = total utility of gum/ price of gum b. Marginal utility of candy/total utility of candy = marginal utility of gum/total utility of gum c. Marginal utility of candy/price of candy = marginal utility of gum/price of gum d. Marginal utility of candy price of candy = marginal utility of gum x price of gum e. Total utility of candy price of candy = total utility of gum price of gum