38) When the price of a product is increases by 15 percent, the quantity demanded decreases 38) by 10 percent. We can therefore conclude that the demand for this product is B) elastic. A) cross-elastic. D) unitary elastic. C) inelastic. 39) 39) Which of the following statements is inconsistent with an elastic demand curve? A) The relative change in quantity exceeds the relative change in price. B) Total revenue increases when price increases. C) Buyers are relatively sensitive to price changes. D) The price-elasticity coefficient is greater than 1. 40) Refer to the diagram. The budget line shift that moves the consumer's equilibrium from 40) point A to point B suggests Good Y B Y B U1 YA A Uo 0 XB XA Good X A) no change in the demand for product X. B) a decrease in the demand for product X. C) that X is an inferior good. D) an increase in the demand for product X.41) The table shows an indifference schedule for several combinations of X and Y. 41) Combination Quantity of X Quantity of Y a 20 b 16 2 C 12 w d 10 4 9 In moving from combination a to b, then to c, d, and e, the marginal rate of substitution of X for Y A) stays the same. B) increases. C) decreases. D) decreases and then increases. 42) 42) The budget line shift from ab to cd in the figure is consistent with Quantity of M C b d 0 Quantity of N A) decreases in the prices of both M and N. B) a decrease in money income. C) an increase in the price of M and a decrease in the price of N. D) an increase in money income and decrease in the price of N. 43) The diamond-water paradox occurs because 43) A) the price of a product is related to its marginal utility, not its total utility. B) water is, in fact, very scarce in certain regions of the world. C) diamonds are more useful than water. D) the price of a product is related to its total utility, not its marginal utility