1.If ICC is a horizontal line, a. Y is an inferior good. c X is an inferior good

ID: 1139361 • Letter: 1

Question

1.If ICC is a horizontal line,

a. Y is an inferior good. c X is an inferior good

b. Y is an income neutral good. d X is a perfectly inelastic good.

2. 2. If the negative income effect just offsets the substitution effect, then

a. good is an inferior good

b. good is a Giffen good

c. good has perfectly inelastic demand

d. both a and b

e. both a and c

3. If good X and Y are perfect complements, the indifference curves are

a. straight lines. b. right angles. c. convex to the origin. d. concave to origin

4. When the demand curve is elastic,

a. price and total expenditure move is in the same direction.

b. price and total expenditure move is the opposite direction.

c. price may be rising or falling but total expenditure is constant.

d. price may be rising or falling but total expenditure depends on supply.

5. If price of Px is falling and PCC is bending towards X axis, then

a. X is an inferior good, Y is a normal good.

b. Y is an inferior good, X is a normal good.

c. X and Y are substitutes

d. X and Y are complements

1.option b.

2. Option D . Both A and B.

3. Option B.

If any two goods X and Y are complements of each other,then their indifference curve will be right angle

That is it is L shaped.

4. Option b.

5. Option c.

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