Sandra consumes two goods–tea and coffee. Her demand for tea is inelastic while her demand for coffee is elastic. If there is an increase in the price of both tea and coffee, ________
A) Sandra's expenditure on both tea and coffee is likely to increase
B) Sandra's revenue on both tea and coffee is likely to decrease
C) Sandra's expenditure on tea will increase and her expenditure on coffee will decrease
D) Sandra's expenditure on coffee will increase and her expenditure on tea will decrease
C
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The money multiplier tends to be greater when
A) individuals hold less cash. B) individuals hold more cash. C) the reserve ratio increases. D) banks hold more excess reserves.
A guarded barbed wire fence separates East and West Bovinia. Soccer players are paid twice as much in West Bovinia as in East Bovinia. This is an example of
a. inelastic supply b. a temporary resource price differential c. a permanent resource price differential d. diminishing marginal revenue product e. economic rent