Many economists consider medical care a superior good. Which of ...

[robinn137]

Many economists consider medical care a superior good. Which of the following statements is true regarding a superior good?
 a. Consumers want more of a superior good regardless of its price.
  b. When the price of a superior good increases, consumers demand more of it.
  c. As consumer income increases a larger percentage of that income is spent on superior goods.
  d. A superior good has an income elasticity of demand greater than one.
  e. Both c and d are true of superior goods.

Question 2

Each of the following provides incentives to reduce a negative externality except:
 a. merger with affected firms.
  b. subsidizing consumption of the good being produced.
  c. bargaining among firms.
  d. taxation of the externality.

[bookworm410]

Answer to Question 1

E

Answer to Question 2

b