* not completed

. Average income increases from £20,000 p.a. to £22,000 p.a. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct?

Demand is price inelastic correct incorrect

The good is inferior correct incorrect

Income elasticity is -2 correct incorrect

The product has a positive income elasticity of demand correct incorrect

* not completed

. The price decreases from £2,000 to £1,800. Quantity demanded per year increases from 5000 to 6000 units. Which of the following is correct?

The price elasticity of demand is -2 correct incorrect

The good is inferior correct incorrect

Income elasticity is + 0.5 correct incorrect

Income elasticity is + 2 correct incorrect

* not completed

. If the price elasticity of demand is unit then a fall in price:

Reduces revenue correct incorrect

Leaves revenue unchanged correct incorrect

Increases revenue correct incorrect

Reduces costs correct incorrect

* not completed

. If the cross price elasticity of demand is -2:

The products are substitutes and demand is cross price elastic correct incorrect

The products are substitutes and demand is cross price inelastic correct incorrect

The products are complements and demand is cross price elastic correct incorrect

The products are complements and demand is cross price inelastic correct incorrect

* not completed

. The income elasticity is +2 and income increases by 20%. Sales were 5000 units, what will they be now?

3000 correct incorrect

7000 correct incorrect

5500 correct incorrect

4500 correct incorrect

* not completed

. The price elasticity of demand is a negative number this means:

Demand is price elastic correct incorrect

Demand is price inelastic correct incorrect

The demand curve is downward sloping correct incorrect

An increase in income will reduce the quantity demanded correct incorrect

* not completed

. Price increases from 10 to 12 pence and the price elasticity of demand is -0.5. The quantity demanded was 500 units. What will it be now?

550 units correct incorrect

500 units correct incorrect

450 units correct incorrect

490 units correct incorrect

* not completed

. If demand is price inelastic:

An increase in price must raise profits correct incorrect

An increase in price decreases revenue correct incorrect

An increase in price increases revenue correct incorrect

A decrease in price reduces sales correct incorrect

* not completed

. For an inferior good with a downward sloping demand curve:

The price elasticity of demand is negative; the income elasticity of demand is negative. correct incorrect

The price elasticity of demand is positive; the income elasticity of demand is negative. correct incorrect

The price elasticity of demand is negative; the income elasticity of demand is positive. correct incorrect

The price elasticity of demand is positive; the income elasticity of demand is positive. correct incorrect

* not completed

. For a normal good with a downward sloping demand curve:

The price elasticity of demand is negative; the income elasticity of demand is negative. correct incorrect

The price elasticity of demand is positive; the income elasticity of demand is negative. correct incorrect

The price elasticity of demand is negative; the income elasticity of demand is positive. correct incorrect

The price elasticity of demand is positive; the income elasticity of demand is positive. correct incorrect