Author Question: The demand for a product is likely to be more elastic: a. the smaller the share of the total budget ... (Read 73 times)

chandani · **on:** Jun 30, 2018

The demand for a product is likely to be more elastic:
a. the smaller the share of the total budget spent on the product.
b. when more complementary products are available.
c. in the short run than in the long run.
d. when more good substitutes for the product are available.

Question 2

Which of the following statements is true?
a. If the income elasticity of demand is less than zero, the good is an inferior good.
b. Only if the demand curve is vertical will sellers raise the price by the full amount of a tax.
c. Two goods are substitutes if the cross-elasticity of demand coefficient is positive.
d. A price elasticity of supply coefficient equal to 1.5 means the product exhibits an elastic supply and a 10 percent increase in the price will increase the quantity supplied by 15 percent.
e. All of these.