Other Economics Answers

The income elasticity of demand for luxury goods is greater than one. This means that the

•  A. percentage change in price is greater than the percentage change quantity demanded.
•  B. percentage change in quantity demanded is greater than the percentage change in income.
•  C. percentage change in quantity demanded is smaller than the percentage change in income.
•  D. percentage change in quantity demanded is equal to the percentage change in income.

"online assessment has become necessary in the implementation measures to combat the spread of covid- 19 pandemic in Ghana's higher educational institutions" . Examine the extent to which this new practice violates the principles of assessment in economics.

Assume Diagram 1 below represents a competitive market. 

Diagram 1

a. What is the overall market situation at a price of $5? 

b. What changes in supply and/or demand would cause the equilibrium market price to fall to $2 (list all possibilities)?

c. If the government imposed a price ceiling of $3 per unit, how does this change the market situation?

d. Suppose the product represented in the graph is a gallon of regular milk. If this were soy milk instead, how do you think the demand curve in this case would change? Explain.

South African Airways (SAA) states that the peak holiday-travel season for the airline is between April and October. If the demand for air travel is inelastic during the peak period and it is elastic from November to March, then which of the following is true?

• A. A drop in price will decrease total revenue in the off-peak months and increase total revenue in the peak travel months.
• B. A rise in price will decrease SAA’s total revenue in the off-peak months, but will increase total revenue in the peak travel months.
• C. A rise in price will increase SAA’s total revenue in the off-peak months, but will decrease total revenue in the peak travel months.
• D. A rise or drop in price will have no discernible impact on SAA’s total revenue.

Suppose the cross-elasticity of demand between two products, A and B, is positive. If there is a fall in the cost of producing good B, the quantity demanded will

•  A. increase for both goods.
•  B. decrease for good A and increase for good B.
•  C. increase for good A and decrease for good B.
•  D. decrease for both goods.

The cross elasticity of demand between a McDonalds burger and a Nandos burger is

A. negative because McDonalds burger and Nandos burger are complements.

B. positive because McDonalds burger and Nandos burger are substitutes.

C. positive because McDonalds burger and Nandos burger are complements.

D. negative because McDonalds burger and Nandos burger are substitutes.

If a 10% increase in income causes a 20% increase in the quantity demanded for a good or service. It can be concluded that

•  A. the income elasticity of the demand for the good or service is negative.
•  B. the price elasticity of the good or service is greater than one.
•  C. the good or service is a necessity.
•  D. the good or service is a luxury good.

Suppose the cross-elasticity of demand between two products, A and B, is positive. If there is a fall in the cost of producing good B, the quantity demanded will

•  A. increase for both goods.
•  B. decrease for good A and increase for good B.
•  C. increase for good A and decrease for good B.
•  D. decrease for both goods.

What type of goods are gas and electricity if the cross elasticity of demand between these two goods are positive?

•  A. complements
•  B. normal goods
•  C. substitutes
•  D. inferior goods