Income elasticity relates to
A) a movement down a demand curve.
B) a movement up a demand curve.
C) a horizontal shift in a demand curve.
D) the percentage change in quantity demanded divided by the percentage change in the price.
C
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In 2012 Nike reduced the price of its running shoes by 20 percent. As a result, the substitution effect caused
A) the demand for Nike shoes to increase. B) people to switch from Adidas shoes and buy more Nikes. C) the relative price of Nikes to increase. D) the demand curve for Nikes to shift rightward.
A firm is a natural monopoly if ________
A. it can produce the good at a price below its competitor's price B. it can produce a larger quantity of the good than other firms could C. the government grants it a public franchise or patent D. it can satisfy the market demand at a lower average total cost than other firms can
In the long run, a monopolistically competitive firm produces at minimum average cost.
Answer the following statement true (T) or false (F)
An increase in the money supply decreases the equilibrium interest rate and shifts the aggregate-demand curve to the right
a. True b. False Indicate whether the statement is true or false