A. The price elasticity of demand is negative the income elasticity of demand is negative
B. The price elasticity of demand is positive the income elasticity of demand is negative
C. The price elasticity of demand is negative the income elasticity of demand is positive
D. The price elasticity of demand is positive; the income elasticity of demand is positive
Related Mcqs:
- Demand for a normal product may shift outwards if ?
A. Price decreases
B. The price of a substitute falls
C. The price of a complement rises
D. income falls - The income effect of a price increase of a normal good is to ________ of that good and the substitution effect is to _________ of that good?
A. increase quantity demanded, reduce quantity demanded
B. increase quantity demanded, increases quantity demanded
C. reduce quantity demanded, reduce quantity demanded
D. reduce quantity demanded, increase quantity demanded - A firm that makes profit in addition to normal profit is making ?
A. Economic profit
B. Accounting profit
C. Normal profit
D. supernormal profit - The U.S has granted China permanent most favored nation treatment (normal trade relations) This means that the tariff schedules which apply to U.S imports from china ?
A. have tariff rates equal to zero suggesting a free trade policy for the United States
B. have lower tariff rates than the rates that apply to any other country sending goods to the United States
C. have tariff rates that are identical to the rates that apply to other countries to which the U.S grants most-favored nation treatment
D. have lower tariff rates than the rates that apply to other countries to which the U.S grants most favored nation treatment - The effect of the most favored nation (normal trade relations) clause is to ?
A. eliminate all tariffs between countries
B. increase all tariffs between countries
C. maintain a nondiscriminatory structure of tariffs
D. maintain a discriminatory structure of tariffs - The normal rate of profit for relatively risk-free firms will be _________ the interest rate on risk-free government bonds?
A. approximately one-half
B. smaller than
C. larger than
D. approximately equal to - Normal profit occurs when ?
A. Average revenue equals average variable cost
B. Marginal revenue equals marginal cost
C. Average revenue equals marginal cost
D. Average revenue equals average cost - Assuming leisure is a normal good, if the income effect is greater than the substitution effect a wage increase ?
A. will have no effect on labour supply
B. will decreases labour supply
C. could cause either an increases or a decrease in labour supply
D. will increase labour supply. - Assuming that leisure is a normal good. if an individual’s labour supply curve is backward bending then the ?
A. income effect is zero
B. substitution effect outweighs the income effect
C. income effect outweighs the substitution effect
D. income effect and the substitution effects are equal - If leisure is a normal good, an increase in the wage ?
A. will always increase the quantity of labor supplied
B. will increase the amount of labor supplied if the substitution effect outweighs the income effect
C. will increase the amount of labor supplied if the income effect outweighs the substitution effect
D. will always decrease the amount of labor supplied
