Question

If a sales tax on beer leads to reduced taxrevenue,this means:
Select correct option:
Elasticity of demand is < 1.
Elasticity of demand is > 1.
Demand is upward-sloping.
Demand is perfectly inelastic.


When the price of petrol rises 10%, the quantity of petrolpurchasedfalls by 8%. The demand for petrol is:
Select correct option:
Perfectly elastic
Unit elastic
Elastic
Inelastic


A Demand Curve is price inelastic when:
Select correct option:
Changes in demand are proportionately smaller than thoseinprice
Changes in demand are proportionately greater than thoseinprice
Changes in demand are equal than those in price
None of the given options.


The effect of a change in the price of a good or service onthequantities consumed when the consumer remains indifferentbetweenthe original and new combination of goods consumed isthe:
Select correct option:
Substitution effect
Real income effect
Income effect
Price effect

The numerical measurement of a consumer’spreference iscalled:
Select correct option:
Satisfaction
Use
Pleasure
Utility


The substitution effect of a price decrease for a good with anormalindifference curve pattern:
Select correct option:
Is always inversely related to the price change.
Measures the change in consumption of the good that is due totheconsumer’s feeling of being richer.
Is measured by the horizontal distance between the original andthenew indifference curves.
Is sufficient information to plot an ordinary demand curve forthecommodity being considered.