Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity
What will be an ideal response?
A flatter demand curve has a smaller slope in absolute value. That means that consumers are more sensitive to price changes. Therefore, a change in price will cause a large reaction in quantity demanded.
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The above table presents data from the nation of Pacifica. Aggregate planned expenditure equals $7.5 trillion when real GDP equals
A) $4.0 trillion. B) $8.5 trillion. C) $7.5 trillion. D) $6.0 trillion. E) $8.0 trillion.
Disposable income ________ when ________
A) decreases; taxes increase B) decreases; transfer payments increase C) increases; government expenditures decrease D) decreases; aggregate income increases
Refer to Figure 13-4. Given the economy is at point A in year 1, what will happen to the price level in year 2?
A) It will fall. B) It will rise. C) It will remain constant. D) not enough information to answer the question
Government may make it possible
A) to create a network externality. B) to find 'winners' in the stock market. C) for a firm to become a monopoly. D) all of these choices.