Use the following graph of the demand for pasta to answer the question below.
Refer to the three demand curves for pasta and assume that pasta is an inferior good. Which of the following would shift the demand for pasta from D1 to D3?
A. an increase in the price of pasta
B. a decrease in consumer incomes
C. an increase in consumer incomes
D. a decrease in the price of pasta
Answer: C
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If the exchange rate rises as shown by the arrow, the price of American exports to foreigners will be ________, and foreign nations will demand ________ dollars in order to buy ________ American exports
A) higher; fewer; fewer B) cheaper; fewer; more C) cheaper; more; more D) cheaper; fewer; fewer E) higher; more; more
Refer to Table 6-1. Suppose you own a bookstore. You believe that you can sell 40 copies per day of the latest John Grisham novel when the price is $35
You consider lowering the price to $25 and believe this will increase the quantity sold to 50 books per day. Compute the price elasticity of demand using the midpoint formula and these data. Select the correct implication from your work. A) The demand for the John Grisham book is elastic. Revenue will rise if the price is lowered. B) The demand for the John Grisham book is elastic. Revenue will fall if the price is lowered. C) The demand for the John Grisham book is inelastic. Revenue will fall if the price is lowered. D) The demand for the John Grisham book is inelastic. Revenue will rise if the price is lowered.