Other Economics Answers

The income elasticity of the demand for shoes is 0,6. Shoes are

•  A. a normal and necessary good.
•  B. a normal but inferior good.
•  C. an inferior and necessary good.
•  D. a normal and luxury good.

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

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.

0.2L+4L²-2L^3. What is the average product and mariginal product of this production equation

A shop sells electric bulbs which it imports from Japan in lots of 1000 bulbs. From

experience, the shop keeper knows that 0.6% of the bulbs per lot are defective. What is the

probability that in a shipment of one lot in a given period:

(i) None of the bulbs is defective (2.5marks)

(ii) Exactly two bulbs are defective (2.5marks)

If Shelly’s income increases by 10% and at the same time there is a 2% decrease in her quantity demanded of potatoes, the income elasticity is

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

•  A. negative because McDonalds burger and Nandos burger are substitutes.
•  B. negative because McDonalds burger and Nandos burger are complements.
•  C. positive because McDonalds burger and Nandos burger are complements.
•  D. positive because McDonalds burger and Nandos burger are substitutes.