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11) Which of the following statements is FALSE?

A) An increase in income causes an increase in the demand for a normal good.

B) An increase in income causes a decrease in the demand for an inferior good.

C) A decrease in income causes the demand curve for a normal good to shift to the left.

D) An increase in income causes the demand curve for an inferior good to shift to the right.

12) Suppose an individual experiences a permanent increase in income. As a result of this increased income, further assume that the individual eats dinner at restaurants more frequently each month. This information suggests that dinners at restaurants for this individual are

A) an inferior good.

B) a substitute good.

C) a normal good.

D) both complimentary and inferior.

 

13) In economic terminology, a normal good is a good

A) on which a monetary value cannot be placed.

B) that is liked only by normal people.

C) for which demand increases when price increases.

D) for which demand increases when income increases.

 

14) In economic terminology, an inferior good is a good

A) that no one will purchase.

B) that doesn't work properly.

C) that has no monetary value.

D) for which demand increases as income decreases.

 

15) If the demand of a good is inversely related to income, it must be

A) a bad good.

B) an inferior good.

C) a normal good.

D) an everyday product.

16) If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team, then these season tickets are

A) a normal good.

B) an inferior good.

C) an income complement.

D) an income substitute.

 

17) An inferior good is one for which

A) demand increases as income increases.

B) demand decreases as income increases.

C) the demand curve is vertical.

D) the demand curve slopes up.

 

18) For a normal good, an increase in consumer income will lead to

I.a movement down the demand curve

II.a rightward shift in the demand curve

III.a reduction in supply

A) I only

B) II only

C) III only

D) Both II and III

 

19) Sarah gets a salary increase of 20 percent. Before her raise, she purchased 5 pounds of hamburger and 1 pound of beef stew a month. After her raise, she consumes 2 pounds of hamburger and 3 pounds of beef stew a month. If everything else is held constant, we know that

A) hamburger is an inferior good and beef stew is a normal good for Sarah.

B) hamburger is a normal good and beef stew is an inferior good for Sarah.

C) both hamburger and beef stew are normal goods for Sarah.

D) both hamburger and beef stew are inferior goods for Sarah.

20) Fashion trends are a nonprice determinant for demand because

A) they cause a movement along the demand curve.

B) they influence people's tastes and preferences in clothing.

C) they change the supply of accessories.

D) they do not affect demand.

 

 

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