Suppose the price for one gallon of gasoline rises from $3.50 to $4.00 and the price of one gallon of milk rises from $3.00 to $3.20 . If the CPI rises from 120 to 132, then people likely will buy
a. more gasoline and more milk.
b. more gasoline and fewer milk.
c. less gasoline and more milk.
d. less gasoline and fewer milk.
c
Economics
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The relationship between disposable income and consumption expenditure is
A) positive. B) U-shaped. C) negative. D) nonexistent. E) not stable because it depends on whether the economy is in equilibrium or not.
Economics
A 10 percent increase in the price of neckties leads to a 5 percent decrease in the quantity demanded of neckties. The absolute price elasticity of demand is
A) 3. B) 0.33. C) 0.5. D) 2.
Economics