26. A good is more likely to exhibit an elastic demand: A) the shorter the time period in which people have to adjust to any price change. B) the less elastic is the demand for any complementary goods. C) the lower the price of the good relative to other goods. D) the more people consider the good a luxury.
27. When two goods are complementary, the cross-price elasticity of demand: A) is positive. B) equals zero. C) is negative. D) may be either positive or negative.
28. If the number of apples sold falls from 700 to 500 when the price of oranges falls from $5 to $4 per bushel, the (arc) cross-price elasticity is: A) 1.5. B) -1.56. C) 1.8. D) -1.75.
29. If a good is a luxury, its income elasticity of demand is: A) positive and less than 1. B) negative but greater than -1. C) positive and greater than 1. D) zero.
30. Which one of the following is not a characteristic of an inferior …show more content…
D) The quantity demanded of the product falls by 37.5%.
35. If the government increases the excise tax on cigarettes by 10%, which of the following statements is correct? A) The government's tax revenue will fall since the demand for cigarettes is inelastic. B) The quantity demanded of cigarettes will fall by more than 10% because the demand is inelastic. C) Both the quantity demanded and supplied of cigarettes will fall by more than 10% because the demand is inelastic. D) The government's tax revenue could decrease if the increased tax resulted in a significant increase in the sale of illegal cigarettes.
36. You wait in line to buy a ticket for a show and are fortunate to buy the last ticket for $65. The lady behind you offers to buy the ticket for $100 but you refuse. We can conclude that the value you place on the show is: A) less than $65. B) $65. C) $100. D) at least $100.
37. After a price ceiling is imposed, the total economic surplus in that market will: A) rise. B) remain unchanged. C)