Suppose that the short-run price elasticity of demand for electricity is 0.03, and the long-run price elasticity of demand is 1.2. One would classify the short-run elasticity as being ________ and the long-run elasticity as being ________.
A. inelastic; unit elastic.
B. elastic; inelastic.
C. elastic; elastic.
D. inelastic; elastic.
Answer: D
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Suppose the government imposes a small carbon tax on automakers. But the price of gasoline has doubled due to a Middle East crisis which has reduced oil production
In the market for autos, these changes mean that supply and demand have both changed with the effect on the demand larger than the effect on the supply. The result is that the price of autos will ________ and the number of autos sold will ________. A) rise; perhaps change but we can't say if it increases, decreases, or stays the same B) rise; increase C) rise; decrease D) fall; perhaps change but we can't say if it increases, decreases, or stays the same E) fall; decrease
An income tax system where higher tax rates are applied to increased amounts of income is called:
A) a regressive tax system. B) a proportional tax system. C) a progressive tax system. D) a flat rate tax system.
Based on the answer above, the price for peanut butter_____________ and the quantity demanded for peanut butter ____________
a. Uncertain; decreases b. Decreases; increases c. Decreases; uncertain d. Increases; uncertain
A focus of antitrust activities is
A) entry blocking. B) price fixing. C) the buying of patents. D) rent-seeking by lobbyists.