If income increases by 10%, but the demand for bus tickets decreases by 15%, then the income elasticity of demand is

Select one:

-1.5 and bus tickets are inferior

1.5 and bus tickets are normal

0.7 and bus tickets are inferior

-0.7 and bus tickets are normal

Clear my choice

The price elasticity of demand measures the

Select one:

Distance a demand curve moves when there is a change in a nonprice determinant of demand

Responsiveness of price to a change in quantity demanded

Responsiveness of quantity demanded to a change in price

Sensitivity of price to changes in quantity demanded

If the price of tomato sauce increases from $2.00 to $2.30 per bottle and the demand for barbeque sauce increases from 100 to 120 bottles per day, then the cross elasticity of demand for barbeque sauce is

Select one:

-0.8 and tomato sauce and barbeque sauce are substitutes

-1.3 and tomato sauce and barbeque sauce are substitutes

1.3 and tomato sauce and barbeque sauce are substitutes

0.8 and tomato sauce and barbeque sauce are substitutes

Food is essential and therefore will have a

Select one:

High price elasticity and a flat demand curve

Low price elasticity and a steep demand curve

Low price elasticity and a flat demand curve

High price elasticity and a steep demand curve

Clear my choice

Consider the following product schedule.

Labour

TP

AP

MP

a

0

0

-

-

b

10

60

6

c

20

140

8

d

30

210

7

7

e

40

240

6

f

50

250

5

What is average product at points b and c?

Select one:

6 and 7 units

60 and 140 units

10 and 20 units

6 and 8 units

If revenue is $400, explicit costs are $200 and opportunity costs are $75, then accounting profit and economic profit are

Select one:

Both $200

Both $125

$200 and $125 respectively

$125 and $200 respectively

The long run average cost curve maps out the minimum points of all possible short run average total cost curves because in the

Select one:

Short run labour is the only fixed factor of production

Long run all factors of production are fixed

Short run all factors of production are variable

Long run all factors of production are variable

If a firm lowers its long run average cost when it produces more output, then this is called a(n)

Select one:

Diseconomy of scale because the long run average cost curve slopes down

Diseconomy of scale because the long run average cost curve slopes up

Economy of scale because the long run average cost curve slopes down

Economy of scale because the long run average cost curve slopes up