If a sales tax on beer leads to reduced tax revenue,this means: Select correct o

Question

If a sales tax on beer leads to reduced tax revenue,this means:
Select correct option:
Elasticity of demand is < 1.
Elasticity of demand is > 1.
Demand is upward-sloping.
Demand is perfectly inelastic.


When the price of petrol rises 10%, the quantity of petrolpurchased falls by 8%. The demand for petrol is:
Select correct option:
Perfectly elastic
Unit elastic
Elastic
Inelastic


A Demand Curve is price inelastic when:
Select correct option:
Changes in demand are proportionately smaller than those inprice
Changes in demand are proportionately greater than those inprice
Changes in demand are equal than those in price
None of the given options.


The effect of a change in the price of a good or service on thequantities consumed when the consumer remains indifferent betweenthe original and new combination of goods consumed is the:
Select correct option:
Substitution effect
Real income effect
Income effect
Price effect The numerical measurement of a consumer’spreference is called:
Select correct option:
Satisfaction
Use
Pleasure
Utility


The substitution effect of a price decrease for a good with anormal indifference curve pattern:
Select correct option:
Is always inversely related to the price change.
Measures the change in consumption of the good that is due to theconsumer’s feeling of being richer.
Is measured by the horizontal distance between the original and thenew indifference curves.
Is sufficient information to plot an ordinary demand curve for thecommodity being considered. If a sales tax on beer leads to reduced tax revenue,this means:
Select correct option:
Elasticity of demand is < 1.
Elasticity of demand is > 1.
Demand is upward-sloping.
Demand is perfectly inelastic.


When the price of petrol rises 10%, the quantity of petrolpurchased falls by 8%. The demand for petrol is:
Select correct option:
Perfectly elastic
Unit elastic
Elastic
Inelastic


A Demand Curve is price inelastic when:
Select correct option:
Changes in demand are proportionately smaller than those inprice
Changes in demand are proportionately greater than those inprice
Changes in demand are equal than those in price
None of the given options.


The effect of a change in the price of a good or service on thequantities consumed when the consumer remains indifferent betweenthe original and new combination of goods consumed is the:
Select correct option:
Substitution effect
Real income effect
Income effect
Price effect The numerical measurement of a consumer’spreference is called:
Select correct option:
Satisfaction
Use
Pleasure
Utility


The substitution effect of a price decrease for a good with anormal indifference curve pattern:
Select correct option:
Is always inversely related to the price change.
Measures the change in consumption of the good that is due to theconsumer’s feeling of being richer.
Is measured by the horizontal distance between the original and thenew indifference curves.
Is sufficient information to plot an ordinary demand curve for thecommodity being considered.

Explanation / Answer

If a sales tax on beer leads to reduced tax revenue, thismeans: Elasticity of demand is < 1.

When the price of petrol rises 10%, the quantity of petrolpurchased falls by 8%. The demand for petrol is:Inelastic

A Demand Curve is price inelastic when: Changes in demandare proportionately smaller than those in price

The effect of a change in the price of a good or service on thequantities consumed when the consumer remains indifferent betweenthe original and new combination of goods consumed is the:Substitution effect

The numerical measurement of a consumer’s preference iscalled: Utility

The substitution effect of a price decrease for a good with anormal indifference curve pattern: Is always inverselyrelated to the price change.

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