Exam 1 True False Flashcards
If the demand rises when income rises, normal good.
True
If a consumer moves from one point on the indifference curve to another point on the same, total utility is unchanged
True
A good with a price elasticity of demand equal to 2.363 would be price inelastic
False
Price elasticity of demand is higher for goods with few substitutes
False
An increase in the money income shifts the budget line to the right
True
It is important for the seller to know if the good is elastic, unit elastic, or inelastic in demand so she will know what will happen to total revenue when price changes
True
The development of a new production technique that lowers the cost of producing will shift the supply curve to the right
True
If the minimum wage law sets a wage floor that is above equilibrium there will be a surplus in labor
True
The free-rider dilemma occurs because an individual can benefit from someone else’s purchase
True
The greater the percent of a budget devoted to a product the more price elastic it will be
True
If the price ceiling of gas is $5 but the equilibriums is $2.75 there is a binding constraint
False
Markets require a physical location
False
Cross-price elasticity of demand measures consumer responsiveness to a change in the price of a good in terms of quantity demanded of another
True
A decrease in price increases the demand for goods purchased
False
Toothpaste and toothbrushes are complimentary
True
