If a firm increases the price of its product in order to grow revenue, this suggests that demand for its product is

a.

income elastic

b.

price inelastic

c.

price elastic

d.

Income inelastic

What is Mary's opportunity cost of operating her own business?

a.

the cost of hiring her employees

b.

All the options are correct

c.

the total amount of money she invest in capital equipment.

d.

The value of the interest she would earn on her funds if she kept it in a bank

Which of the following statements concerning the distinction between positive and normative economics is TRUE?

a.

Positive statements are concerned with what people think, while normative statements are concerned with what people do.

b.

Positive statements are true while normative statements are false c.

Positive statements are concerned with what is while normative statements are concerned with what will be.

d.

Positive statements are concerned with what is while normative statements are concerned with what should be.

Table 1.0

Details	Pumpkin (kgs)	Melon (kgs)
A	0	55
B	10	50
C	20	42
D	30	28
E	40	0

The table above (table 1.0) represents a farmer's production of pumpkins and melons. Suppose the farmer produces 50 kgs of melon and 10 kgs of pumpkin at Point B. The opportunity costs of 10 more kgs of pumpkin is

a.

impossible to determine from the information given

b.

10 kgs of pumpkin

c.

42 kgs of melon

d.

8 kgs of melon

A 10 percent increase in the quantity of spinach demanded results from a 20 percent decline in its price. The price elasticity of demand for spinach is

a.

0.67

b

0.50

c.

2.00

d.

0.33

The cross elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of

a.

neitherits complements nor its substitutes.

b.

its substitutes but not its complements

c.

its complements but not its substitutes.

d.

its complements and its substitutes.