When the consumer spends a large portion of her income on a good, demand will be
A) elastic.
B) unit-elastic.
C) inelastic.
D) elastic, unit-elastic or inelastic depending upon supply.
Answer: A
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Social Security is an example of
A) a progressive income tax. B) a subsidized service. C) an income maintenance program. D) an unemployment benefit.
In a competitive industry
a. firms have no cost advantages b. some firms have cost advantages, while others do not c. all the firms have highly differentiated products d. Consumers have strong preferences across brands
The production possibilities frontier cannot be used to show
A. scarcity in a society. B. the trade-offs involved in production decisions. C. the unequal distribution of resources among the members of society. D. All of the responses are correct.
The relationship between money growth rates and inflation between 1982 and 2010 helps explain why, by the 1990s, most economists had
a. adopted the monetarist explanation of inflation. b. adopted a rules-only approach to monetary policy. c. become more convinced of the monetary causes of inflation. d. abandoned monetarism as the primary explanation of inflation.