1.Samantha has a jewelry store. She is currently charging $22 for a new wrist watch. If the price elasticity of demand is 1.5, which of the following statements is true?

Question 1 options:

a).If Samantha raises her price, she will not lose very many new customers, and her total revenue will increase.

b).If Samantha raises her price, she will lose a lot of customers, and her total revenue will decrease.

c).If Samantha lowers her price, she will not get very many new customers, and her total revenue will decrease.

d).If Samantha changes her price (increase or decrease), the number of customers will change proportionally and total revenue will remain the same.

e).None of the above.

2.When Coke is on sale at Giant's grocery store, sales of Pepsi drop (and vice versa).This is because the two goods have a cross elasticity of demand that is ____________.

Question 2 options:

a).less than one

b).greater than one

c).positive

d).negative

e).zero