Supply can shift due to changes in price

When income increases from $20,000 to $30,000 the quantity of inter-city bus trips taken per year decreases from 10 to 8. Hence

A) inter-city bus trips are a normal good. B) the income elasticity of demand for inter-city bus trips is -1.8. C) the income elasticity of demand for inter-city bus trips is -0.56. D) Both answers A and B are correct. E) Both answers A and C are correct.

Refer to Scenario 10.6. If red rubber balls can be produced at any of the three plants, what is the marginal cost of 5th red rubber ball?

A) 4 B) 5 C) 8 D) 20 E) none of the above