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.