Econ - econ PDF

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1. If preferences are quasilinear, then for very high incomes the income offer curve is a straight line parallel to one of the axes. ANS: T DIF: 1 2. In economic theory, the demand for a good must depend only on income and its own price and not on the prices of other goods. ANS: F DIF: 1 3. If two goods are substitutes, then an increase in the price of one of them will increase the demand for the other. ANS: T DIF: 1 4. If consumers spend all of their income, it is impossible for all goods to be inferior goods. ANS: T DIF: 2 5. An Engel curve is a demand curve with the vertical and horizontal axes reversed. ANS: F DIF: 1 6. If the demand curve is a downward-sloping straight line, then the price elasticity of demand is constant all along the demand curve. ANS: F DIF: 2...