1.A 10 percent increase in the consumer income causes a 5 percent increase in the quantity demanded for CD. The income elasticity of demand for CD is:

Select one:

a. +0.5

b. -2.0.

c. +2.0.

d. -0.5.

2.Assume that Gina is allocating her budget optimally between two products. If the MU of product X is 50 and its price is $10, what must be the price of product Y if its MU is 80?

Select one:

a. $7.50

b. $12

c. $960

d. $16

e. $12

3.Both the total product and marginal product fall when diminishing return starts.

Select one:

True

False

4.Ensuring the right type of products are produced is referred to as _________ efficiency.

Select one:

a.Productive

b.Economic

c. Technical

d. Allocative

5.If the demand for a product is elastic, then total revenue will:

Select one:

a. fall as price falls.

b. rise as price falls.

c. be constant in response to a price change.

d. increase whether price increases or decreases.