23) If the income elasticity of a particular product is -0.2, it would be considered A) a superior g

23)
If the income elasticity of a particular product is -0.2, it would be
considered

A)
a superior good. B) a normal good.
C)
an inferior good. D) an elastic good.

24)
If a firm decreases the price of a product and total revenue decreases, then

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A)
the demand for this product is price elastic.
B)
the demand for this product is price inelastic.
C)
the cross elasticity is negative.
D)
the income elasticity is less than 1.

25)
If the price of a product is increased and total revenue received from the sale
of this product
increases,
then the price elasticity of demand for the product is

A)
elastic.
B)
inelastic.
C)
unitary.
D)
None of the above.

26)
If there is an increase in consumer income and the demand for a product
declines, then the
product
is

A)
a luxury good. B) a necessity good.
C)
a normal good. D) an inferior good.

27)
If the price of Product A increases and this results in a decrease in the
demand for Product B,
then
Products A and B are

A)
complements. B) substitutes. C) inferior. D) normal.

28)
If the price of a product is decreased and total revenue received from the sale
of this product
does
not change, then the price elasticity of demand for the product is
A)
elastic. B) inelastic. C) unitary. D) None of the above.

29)
If the demand for a product is price inelastic and the product price is
increased, then the
marginal
revenue (MR) received by the seller will

A)
not change.
B)
decrease.
C)
increase.
D)
Can’t be determined from this information.

30)
If the price elasticity of supply of a product is elastic and the product price
increases, then the
increase
in the product supply should be

A)
greater than the increase in price.
B)
less than the increase in price.
C)
the same as the increase in price.
D)
Can’t be determined from this information.

31)
Which of the following is not a determinant of price elasticity of demand?

A)
product durability B) technology
C)
ease of substitution D) proportion of total expenditures

32)
If government imposes a price ceiling on a product that is below the market
equilibrium price, then

A)
a surplus will develop.
B)
a shortage will develop.
C)
producers will reduce their sales price.
D)
consumers will reduce their demand for the product.

33)
If government imposes a price floor on a product that is above the market
equilibrium price,
then

A)
a surplus will develop.
B)
a shortage will develop.
C)
producers will increase their sales price.
D)
consumers will increase their demand for the product.

34)
If government imposes an excise tax on a product and the tax burden is borne
equally by
buyers
and sellers, then

A)
price elasticity of demand is unitary.
B)
price elasticity of supply is unitary.
C)
the absolute values of price elasticities of demand and supply are equal.
D)
None of the above.

 

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