HADM 5333 PRACTICE Midterm Read Carefully! DO YOUR OWN WORK Time: 1.5 Hours (20 points) a. What do we call a good with an income elasticity that is greater than one? Explain. b. True or false: an income elasticity of demand of 0.45 for all medical products implies that consumption will be higher among low-income people than among high-income groups. Explain c. Studies find that teenagers have a higher price elasticity of demand for cigarettes than do adults. Why might this be true? Explain. d. When the government sets a price and it is illegal to trade below that price. What is this phenomenon called? Show this graphically. e. If the cross-price elasticity of demand between two goods is positive, what kind of relationship exists between the two goods? Explain