Question

If the income elasticity of demand is equal to 1.43, it can be concluded that the good is:

Select one:

a. elastic

b. inelastic

c. normal

d. inferior

If the price of a good rises and the quantity purchased falls by a smaller proportionate amount, we say:

Select one:

a. Demand is elastic

b. Demand is inelastic

c. The firm should lower prices to increase revenue

d. The law of demand has been violated

Which of the following is NOT an example of a fixed cost?

Select one:

a. mortgage on a retail store

b. business property taxes

c. equipment rental

d. wages paid to workers