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Questions and Answers
What does a positive income elasticity indicate about a commodity?
What does a positive income elasticity indicate about a commodity?
- It is a luxury good. (correct)
- It is a substitute good.
- It is an inferior good.
- It is a necessity good.
Which reason would NOT cause a shift of the demand curve to the right for a normal good?
Which reason would NOT cause a shift of the demand curve to the right for a normal good?
- A change in taste towards a competitor good (correct)
- A fall in the price of substitutes
- An increase in household incomes
- An expected future rise in the price of the good
If two goods are considered complements, what can be said about their cross elasticity of demand?
If two goods are considered complements, what can be said about their cross elasticity of demand?
- It is a positive value.
- It is negative. (correct)
- It is equal to zero.
- It can be positive or negative depending on consumer preference.
What term describes the phenomenon where an employee faces penalties for providing information in a discrimination claim?
What term describes the phenomenon where an employee faces penalties for providing information in a discrimination claim?
Which statement about unrelated products and their cross elasticity is correct?
Which statement about unrelated products and their cross elasticity is correct?
Flashcards
Inferior good
Inferior good
A good whose demand decreases as income increases.
Complements
Complements
When the price of one good goes down, demand for the other good also goes down.
Elastic demand
Elastic demand
Describes the situation when a change in price has a relatively large impact on the quantity demanded.
Positive action
Positive action
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Victimisation
Victimisation
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Study Notes
Discrimination in Employment
- Discrimination occurs when an employee is penalized for providing information in a discrimination claim.
Income Elasticity
- A positive income elasticity indicates a normal good.
- Complements have a negative cross elasticity.
- Goods with a price elasticity greater than 1 are elastic.
- Unrelated products have an infinite cross elasticity.
Demand Curve Shifts
- A demand curve shifts to the right for a normal good with a fall in the price of substitutes.
- A change in tastes towards competitor goods causes a demand curve to shift.
- An increase in household income shifts the demand curve to the right.
- An expected future price increase shifts the demand curve to the right.
- An increase in population shifts the demand curve to the right.
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