1. Deb's income has just risen from $950 per week to $1,050 per week. As a result, she decides to increase the number of movies she attends each month by 5 percent. Her demand for movies is

Select one:

a. income inelastic.

b. income elastic.

c. represented by a horizontal line.

d. represented by a vertical line.

1. Larry spends all his $800 monthly income on pizza and gasoline. The price of pizza is $4 a slice, and the price of gasoline is $2 per gallon. If Larry buys 150 slices of pizza per month, his budget constraint will allow him to buy ________ gallons of gas per month.

Select one:

a. 80

b. 200

c. 100

d. 120

1. A consumer is in equilibrium when the consumption point is on

Select one:

a. the highest indifference curve that just touches the budget line.

b. the budget line.

c. none of the above.

d. an indifference curve.

1. If the cross elasticity of demand between goods X and Y is positive and between goods X and Z is negative, then X and Y are ________ and X and Z are ________.

Select one:

a. price inelastic; complements

price inelastic; complements

b. substitutes; complements

c. complements; substitutes

d. price inelastic; income elastic

1. Junkfood Jill spends all of her income on jellybeans and Jolt cola. Suppose that Jill's income is $30, the price of a bag of jellybeans is $6, and the price of a bottle of Jolt cola is $2. If bags of jellybeans are graphed along the vertical axis and bottles of Jolt cola are graphed along the horizontal axis, what is the slope of the budget line?

Select one:

a. 3

b. 1/3

c. -3

d. -1/3

1. Shaniq consumes only magazine and CDs. Her income equals $60 per month. CDs are $12 each and magazines are $5 each. What is the equation for her budget line?

Select one:

a. 12 = -2Qm+ 6

b. $60 =Qm+QCD

c. $60 = 12QCD+ 5Qm

d. $60 = $12Qm+ $5QCD

1. Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent.

Select one:

a. 6.0

b. 2.0

c. 12.0

d. 3.0

1. When the price of a movie ticket increases from $5 to $7, the quantity of tickets demanded decreases from 600 to 400 a day. What is the price elasticity of demand for movie tickets?

Select one:

a. 1.20

b. 2.32

c. 0.83

d. 1.00

9. You are the new vice president in charge of advertising at Taco Bell. In your upcoming advertising campaign, you plan to degrade the fast food competitor whose product is the closest substitute for Taco Bell's tacos. That would be the fast food chain whose cross elasticity of demand with your tacos is equal to

Select one:

a. negative 1.75.

b. positive 1.55.

c. positive 1.00.

d. negative 2.11.

1. Jordan has two goods that he consumes this week. He can choose to go to the arcade and play video games or he can purchase baseball cards. The price of each video game is $.50 and each pack of baseball cards is $1. Jordan will spend all his allowance this week on these two goods. Jordan's consumption possibilities are listed in the table above. Which of the following combinations of video games and baseball cards is not attainable for Jordan?

Select one:

a. 10 video games and 3 sets of baseball cards

b. 8 video games and 1 set of baseball cards

c. 0 video games and 5 sets of baseball cards

d. 3 video games and 3 sets of baseball cards

1. Suppose tennis shoes cost $50 per pair and firms supply 50,000 pairs of shoes. If the price decreases to $45 and firms decide to supply 48,000, the elasticity of supply equals

Select one:

a. 2.63.

b. 0.04.

c. 0.39.

d. 0.0025.

1. As Mary's income increases by 20 percent, her demand for tickets to National Hockey League games increases by 10 percent. Mary's demand for tickets is income ________; for Mary, hockey tickets are ________ good.

Select one:

a. elastic; an inferior

b. inelastic; an inferior

c. inelastic; a normal

d. elastic; a normal