If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product, this product is
A) a necessity. B) an income elastic good.
C) an inferior good. D) a luxury good.
C
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The chief economist of the country of Borduria has implemented a policy of maintaining the currency of Borduria at a low value compared to its trading partner. This will cause: a. the Bordurian exports to be cheaper for its trading partner
b. the Bordurian exports to become more expensive for its trading partner. c. the Bordurian interest rates to be higher than its trading partner. d. Borduria's imports from its trading partner to become less expensive.
If the absolute price of a computer is $600 and the relative price of a dining room table is 3 computers, it follows that the absolute price of a dining room table is
a. $1,800. b. $200. c. $3,000. d. $30,000. e. none of the above