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kumpel [21]
4 years ago
14

A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the pri

ce of macaroni and cheese. From this information, we can assume:(A) macaroni is a normal good and price elasticity of demand is greater than 1.(B) macaroni is an inferior good and price elasticity of supply is equal to zero.(C) macaroni is an inferior good and price elasticity of supply is infinite.(D) macaroni is an inferior good and price elasticity of demand is less than 1.
Business
2 answers:
nalin [4]4 years ago
8 0

Answer:

Here the correct answer is C)

Explanation:

Inferior goods can be described as those goods whose demands decreases , when the income of the customers increases. These goods are related to negative income elasticity, they have inverse relationship with price.

Price elasticity of supply is infinite means that there will be change in the price and goods would be supplied at one or same price only. The graph of this price elasticity of supply would be horizontal.

In the given above question it is quite clear that macaroni and cheese are inferior goods and their price elasticity of supply is infinite ( means they will be supplied at same or one price ).

Tanya [424]4 years ago
7 0

Answer:(B) macaroni is an inferior good and price elasticity of supply is equal to zero

Explanation:due to rise in income, people preferred other goods. This makes it an inferior good. Price elasticity is zero as there is no change in price of good.

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I guess the correct answer is be inward looking, focusing on selling what the firm makes.

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4 0
3 years ago
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The graph shows excess demand. A graph titled Excess supply has quantity on the x-axis and price on the y-axis. A line with posi
Tema [17]

Answer:

The price of goods needs to be increased.

Explanation:

Excess demand occurs when the quantity demanded is higher than the quantity supplied. This happens when the price of the good is lower than the equilibrium price. This can happen naturally in the market, or can happen if the government imposes a binding price floor.

The best way to solve excess demand is to raise the price, in order to reach equilibrium. Once in equilibrium, the price will coordinate the quantity supplied and the quantity demanded so that they're roughly equal.

7 0
3 years ago
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A bond portfolio and a stock portfolio both provided an unrealized pretax return of 8% to a taxable investor. If the stocks paid
tankabanditka [31]

Answer:

A bond portfolio and a stock portfolio both provided an unrealized pretax return of 8% to a taxable investor. If the stocks paid no dividends, we know that the ________.

The after-tax return of the stock portfolio was higher than the after-tax return of the bond portfolio.

Explanation:

The returns from the bond portfolio are taxed at the corporate rate while returns from stock investments are taxed at a lower rate.  It is well-known that the risks from stock are higher than the risks from bonds.  As a result, the stock investments always attract higher returns and less tax, as the investor can postpone the tax for a longer term.   Again, stock investments can be for the long-term unlike bonds that have defined periods.

7 0
4 years ago
Assume that a family spends 35% of its income on housing, 20% on travel-related expenses, 10% on utilities, 25% on health care,
iogann1982 [59]

Answer:

We need the slope of each category.

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Having the amount of each category is not enough to find the responsive of each one of them to a change in their prices, we need a measure called elasticity, this indicator measures the responsive of a product to a change in its price.

5 0
3 years ago
Kingbird Company is negotiating to lease a piece of equipment to MTBA, Inc. MTBA requests that the lease be for 9 years. The equ
kolbaska11 [484]

Answer:

$ 7,994

Explanation:

Fair Value of lease 60,000

Less Present value of garanteed residual value$ 2,368

($4000*1/1.06^9)

Amount to be recovered through periodic payment $ 57,632

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Therefore the amount of the annual rental payments Kingbird demands of MTBA, assuming each payment will be made at the beginning of each year and Kingbird wishes to earn a rate of return on the lease of 6 $7,994

8 0
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