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QUESTION 14 Which of the following statements best describes a normal good? A normal good is a good that is readily available in the market. A normal good is a good whose demand increases with an increase in consumers' income. A normal good is a good that is rationed by the government. A normal good is a good whose supply increases with a decrease in its price. QUESTION 15 At a price of $1 per table, the quantity supplied of tables is 100 units, whereas the quantity demanded is 70 units. Given this information, which of the following statements is true? The market clearing price is $1 per table. The equilibrium price is $1 per table. At a price of $1 per table, there is a surplus in the market. At a price of $1 per table, there is a shortage in the market. Which of the following is true of a good that has a price elasticity of demand of -3? If the income of a consumer increases by 1 percent, the quantity demanded of the good will increase by 3 percent. If the price of the good increases by 3 percent, the quantity demanded of the good will increase by 1 percent. If the income of a consumer increases by 3 percent, the quantity demanded of the good will increase by 1 percent. If the price of the good increases by 1 percent, the quantity demanded of the good will decrease by 3 percent. QUESTION 23 Which of the following best describes scarce resources? Resources for which the quantity demanded is the same for all economic agents Resources that most people cannot afford to buy Resources for which the quantity that people want exceeds the quantity that is freely available Resources that can only be distributed efficiently by the government An increase in the price of aviation fuel will cause which of the following for the supply of flights from New York to Los Angeles? A decrease in supply No change in supply, but an increase in quantity supplied An increase in supply No change in supply, but a decrease in quantity supplied QUESTION 26 Which of the following statements correctly identifies the difference between the cross-price elasticity of demand and the income elasticity of demand? The cross-price elasticity of demand has only negative values, whereas the income-elasticity of demand can have both positive and negative values. The income elasticity of demand for a good is independent of the price changes of related goods, whereas the cross-price elasticity of demand for a good is independent of the income changes of the consumer. The income elasticity of demand for a good is zero for normal goods, whereas the cross-price elasticity of demand for a good is always positive for normal goods. The income elasticity of demand has only positive values, whereas the cross-price elasticity of demand can have both positive and negative values.

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14.Ans: A normal good is a good whose demand increases with an increase in consumer's income.

15.Ans: At a price of $1 per table, there is a surplus in the market.

Explanation:

When quantity supplied is greater than quantity demanded , then there will be surplus in the market.

When quantity supplied is less than quantity demanded , then there will be shortage in the market.

Ans: If the price of the good increases by 1 percent , the quantity demanded of the good will decrease by 3 percent.

Explanation:

According to the law of demand  there is an inverse relationship between price and quantity demanded.

23.Ans: Resources for  which the quantity that people want  exceeds the quantity that is freely available.

Ans: No change in supply, but a decrease in quantity supplied.

26.Ans: The income elasticity of demand for a good is independent of the price changes of the related goods, whereas the cross- price elasticity of demand for a good is independent of the income changes of the consumer.

 

 

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