Suppose that when income decreases from $800 to $400 a month, the quantity demanded for take outs dinners decreases from good 15 units to 10 meals a month. Which of the following statements can we make given this information? (Use the midpoint method to perform any computations you deemed necessary.)i. The good is a normal good.ii. The good is income inelastic.iii. The good is a necessity good.

Which of the following statements about income elasticity of demand is/are TRUE? i. Normal goods always have a positive income elasticity of demand.ii. When the income elasticity of demand for a good is greater than 1, an increase in the level of income leads to an increase in the share of income spent on the good.iii. Inferior goods have an income elasticity of demand between 0 and 1.

Questions 23 – 26 refer to the graph below and the following scenario: the government has a buyout program according to which it purchases all the excess supply needed to prevent the price from falling below $9.

Which of the following statements about the deadweight loss of a tax is/are TRUE?i. It tends to be larger when taxes are larger.ii. It is zero when supply is perfectly inelastic.iii. It is zero when demand is perfectly inelastic.

Consider the following statements about the rent control policy and assess their veracity. It is a price ceiling on rents intended to make housing more affordable for the poor. Reduced rent creates a relatively small shortage of housing in the short-run, but a larger shortage in the long-run, because supply and demand are more elastic in the long-run. It is a price floor designed to stimulate construction of large apartment complexes.

Sonya loves the “Escape Room” and she has already gone five times this week. Her sister Alya is asking her to go with her for what would be Sonya’s sixth time. Assuming that Sonya is rational and that her dollar measure of this sixth time is $30, Sonya will choose to go under which of the following scenarios?i. The dollar measure of the cost of this sixth time is $50.ii. The dollar measure of the cost of this sixth time is $30.iii. The dollar measure of the cost of this sixth time is not greater than $30.

Two things happen: (1) Price of doughnuts, a substitute, has gone down and (2) an improvement in technology has enabled suppliers to produce twice as many Cookies.

Consider the market for Uber rides in New York City. Suppose consumers’ income decreases and that, as a result, the equilibrium price decreases and the equilibrium quantity remains unchanged. Which of the following is a possible explanation for why this happened?

Two things happen: (1) number of students attending ECON 1101 has increased this year and (2) an improvement in technology has enabled suppliers to produce twice as many Cookies.

Consider the following two statements and determine whether they are positive or normative. Studies show that an increase in drug education will lower the number of drug users. The government should impose a spend money on drug education in public schools