Category: Economics

➤ Why would the demand for the sports magazine likely be inelastic given a $20,000 income and $100 price?
$100 equals 0.5% of a $20,000 income, which is a very small budget share. Goods with tiny income shares tend to be less sensitive to price changes, so consumers often keep buying. Habit, brand loyalty, and few close substitutes further support inelastic demand, though close substitutes could change responsiveness.

➤ How did surveys measure who refused to take the threat seriously?
Polls used direct questions about perceived severity, agreement with statements that the virus was overblown, and self-reported behavior like masking or social distancing. Standard methods include random sampling, Likert scales, and demographic weighting. Timing, wording, and response bias affected estimates, so cross-survey comparisons require caution.

Which of the following is directly impacted by bird flu?a. Supply of chicken and eggsb. Demand for chickens and eggsc. Supply of products containing eggsd. Demand for products containing eggs

➤ How does PPI differ from the Consumer Price Index (CPI) and core inflation?
PPI focuses on prices received by producers, while CPI measures prices paid by consumers. Core inflation removes volatile food and energy from CPI. PPI covers upstream wholesale and producer transactions, and it can lead CPI because producer price shifts may pass through to retail after margins, taxes, and distribution costs.

Which of the following is not an example of non-price rationinga. a minimum wage lawb. a maximum wage lawc. rent controld. a tax on gase. the sale of tickets to a movie that will be sold out