If a products income elasticity of demand is 17 then

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Consumer Behavior
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Chapter 15 / Exercise 8
Consumer Behavior
Hoyer/MacInnis
Expert Verified
9) If a product's income elasticity of demand is -1.7, then we can conclude that A) an increase in income will lead to an increase in demand for the product. B) the product is certainly a necessity. C) the product is a luxury good. D) a decrease in income will lead to an increase in demand for the product. E) the product is a normal good.
10) Normal goods
Figure 1: The initial market equilibrium is P = $2.00 and Q = 1000. Suppose the government imposes a tax of $0.60 per soft drink purchased. 11) Refer to Figure 1. After the tax is imposed, the price paid by the consumer becomes
12) Refer to Figure 1. The after-tax price received by the seller becomes
13) Refer to Figure 1. After the tax is imposes, the change in total expenditure on soft drinks is A) a decrease of $80. B) a decrease of $160. C) an increase of $320. D) an increase of $480. E) No change in total expenditure.
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Consumer Behavior
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Chapter 15 / Exercise 8
Consumer Behavior
Hoyer/MacInnis
Expert Verified
14) The imposition of an excise tax will cause the least burden on consumers when demand is
15) A value of zero for the elasticity of supply of some product implies that
16) If pizza and beer are complementary goods, we can conclude that
17) Suppose the cross-price elasticity of demand between raspberry jam and strawberry jam is 7.5. The interpretation of this result is that A) a 10% increase in the price of strawberry jam leads to a 7.5% increase in quantity demanded of raspberry jam. B) a 10% increase in the price of strawberry jam leads to a 0.75% increase in quantity demanded of raspberry jam. C) a 10% increase in the price of strawberry jam leads to a 75% increase in quantity demanded of raspberry jam. D) a 10% increase in the price of strawberry jam leads to a 7.5% decrease in quantity demanded of raspberry jam. E) a 10% increase in the price of strawberry jam leads to a 75% decrease in quantity demanded of raspberry jam.

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