Suppose that consumer income decreases and that hamburger is an inferior good. Which of the following will occur in the market for hamburger?
A) Market clearing price will rise, and equilibrium quantity will rise.
B) Market clearing price will fall, and equilibrium quantity will fall.
C) Market clearing price will rise, and equilibrium quantity will fall.
D) Market clearing price will fall, and equilibrium quantity will rise.
A
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Money serves all of the following functions except:
A) medium of exchange. B) store of value. C) unit of account. D) measure of power.
The government heavily subsidizes the production of ethanol to encourage the purchase of ethanol over oil, a less environmentally friendly form of energy. Given that the supply elasticity of ethanol, ?, is estimated to be about 0.13, what would the elasticity of demand, ?, have to be for consumers to receive at least half of the subsidy, and therefore encourage ethanol consumption?
A) ? must be less than |0.13|. B) ? must be greater than |0.13|. C) ? must be more inelastic than the elasticity of supply. D) Both A and C.