Consider a 20 Percent Increase in the Price of a 2

question 27

Multiple Choice

Consider a 20 percent increase in the price of a 2 pound bag of sugar and a 20 percent increase in the price of first- class airline travel. In response to the price changes, which of the following is most likely to be true?

• A)The total revenue from first- class airline travel will not change.
• B)The percentage change in the quantity demanded for a 2 pound bag of sugar will be larger than the percentage change in the quantity demanded for first- class airline travel.
• C)Because first- class airline travel is a luxury good, the quantity demanded will not change with the 20 percent increase in price.
• D)The percentage change in the quantity demanded for first- class airline travel will be larger than the percentage change in the quantity demanded for a 2 pound bag of sugar.

---

Definitions:

Democrats

A political party in the United States that generally supports liberal, progressive policies on social and economic issues.

Republicans

Members of the Republican Party, one of the two major political parties in the United States, traditionally characterized by a conservative ideology that emphasizes free market policies, limited government, and strong national defense.

Model Metropolis

A conceptual city designed or considered as an ideal example due to its layout, infrastructure, governance, or quality of life.

Chicago

A major city in the United States located in the state of Illinois, known for its vibrant arts scene, numerous cultural attractions, and significant architectural achievements.