00:01
Hello, let's start with the first question.
00:07
First question is given that if the demand for a good increase from 300 to 320 as a result of a 20 % increase in consumer income.
00:22
So it's given that income increased and as a result quantity demanded also increased.
00:34
Increased and this means that this good is normal if quantity decreases when income increases in this case it will be the inferior good but since the increase in income leads to an increase in demand in quantity demanded this good is normal so the answer is true.
01:11
Okay, the second question.
01:15
If the demand curve for good has a slope of one negative 1 .5 and is constant, this will imply that it is an elastic good.
01:28
And actually it's not true, it's false, false.
01:39
So the slope doesn't say anything about elasticity at some point.
01:46
So we don't know is it elastic or inelastic or it might be even unit elastic.
01:53
So we need to know the exact point and at this point we can evaluate, we can find the price elasticity of demand.
02:04
So the slope itself doesn't imply anything in this context.
02:10
So we don't know is it elastic or not.
02:15
And actually it might be the same demand curve is elastic in some area, in some part of this curve, and then it becomes inelastic...