1 As incomes increase the demand for food tends to increase

1) As incomes increase, the demand for food tends to increase less than proportionately, suggesting that

a.    the demand for food is sluggish

b.   food is an inferior good

c.    the demand for food is income elastic

d.   the demand for food is income inelastic

2 Which of the following will not cause a change in the supply of pencils?

a.    a change in the price of pencils

b.   a change in resource prices associated with pencil making

c.    a change in the price of erasers and other related goods in production

d.   a change in pencil-making technology

e.    a change in the number of pencil suppliers

3 Another word for elasticity is

a.   sensitivity             

b. happiness              

c. rubbery             

d. profit

4 Market supply and demand curves both have determinants which depend on

a.    Technology.

b. The price of the good itself

c.    The price of other goods.

d.   Income.

Please Help

Solution

Ans:

1) Option D

the demand for food is income inelastic

It is given that as incomes increase, the demand for food tends to increase less than proportionately, it means change in demand is less than change in income.when the change in demand for food is less than change in income, it means demand for food is income inelastic.

2) Option C

a change in the price of erasers and other related goods in production

when the price of complementary goods changes, this causes a change in demand and not supply.In this case change in the prices of erasers does not cause a change in the supply of pencils.

3) Option A

sensitivity

Elasticity measures the change.The another word for elasticity is sensitivity.