Answer the following statement true (T) or false (F)
1) If price and total revenue are directly related, demand is inelastic.
2) If price changes and total revenue changes in the opposite direction, demand is relatively
elastic.
3) Cross elasticity of demand measures the effect of a change in the price of one product on the
quantity demanded of another product.
4) Income elasticity measures the effect of a change in income on the purchases of some good
or service.
5) If the coefficient of income elasticity of demand is positive, the product is an inferior good.
1) T
2) T
3) T
4) T
5) F
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The nominal interest rate ________
A) makes no allowance for inflation B) is a percentage of the amount borrowed C) is the rate that most banks advertise D) all of the above E) none of the above
In a perfectly competitive market, the good or service cannot differ substantially among sellers
a. True b. False