Which of the following would tend to INCREASE the elasticity of demand for good X?
A. a new product, Y, which can be used in place of X, is introduced.
B. the percent of a consumer's income spent on good X declines.
C. a new discovery allows firms to produce X at a much lower cost.
D. both b and c
E. all of the above
Answer: A
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Which of the following financial futures contracts are traded in the United States?
A) Interest rates B) Stock indexes C) Currencies D) All of the above
By 2020, automobile market analysts expect that the demand for electric autos will increase as buyers become more familiar with the technology
However, the costs of producing electric autos may increase because of higher costs for inputs (e.g., rare earth elements), or they may decrease as the manufacturers learn better assembly methods (i.e., learning by doing). What is the expected impact of these changes on the equilibrium price and quantity for electric autos? A) Unambiguously higher equilibrium price and quantity B) Unambiguously higher price, and equilibrium quantity may be higher or lower C) Unambiguously higher quantity, and equilibrium price may be higher or lower D) We cannot form any unambiguous expectations for either price or quantity