20) If the demand for good Z is perfectly inelastic, the demand curve is 20) ______
A) indeterminate, as information is not sufficient.
B) upward sloping.
C) downward sloping.
21) Which one of the following must be true if demand is income elastic? 21) ______
A) An increase in income will cause a decline in quantity demanded.
B) A percentage change in price will lead to a larger percentage change in quantity
C) A small percentage increase in income will result in a large percentage increase in quantity
D) A large percentage increase in income will result in a small percentage increase in quantity
E) The good must be inferior.
22) Fred's income has just risen from $800 per week to $1,200 per week. As a result, he decides to 22) ______
purchase 40 percent more bubble gum per week. The income elasticity of Fred's demand for
bubble gum is
A) 0.12. B) 10. C) 0.40. D) 40. E) 1.0.
23) If the cross elasticity of demand between goods A and B is positive, then 23) ______
A) the demands for A and B are both price inelastic.
B) the demands for A and B a