According to Table 2.1, which presents hypothetical data on price elasticity of demand, which good's demand is most sensitive to changes in price?
A. Car Repair
B. Bread
C. Electricity
D. Lamb
D. Lamb
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If the nominal interest rate is 0% and the real interest rate is 2%, what is the inflation rate?
A) -2% B) 2% C) -4% D) 0%
To cut inventories, firms produce ________ and real GDP ________, which ________ people's incomes
A) less; rises; lowers B) less; falls; lowers C) less; rises; raises D) more; falls; lowers E) more; rises; raises
If the external costs of production are not taken into account, then production will
A) be less than socially desirable. B) be more than socially desirable. C) be the same since only prices are affected by externalities. D) cease.
The demand curve facing a firm acts as a constraint by
a. shifting to the left and right as suppliers vary their quantities b. showing the maximum price that could be charged to sell a specific output level c. showing the minimum quantity of output that a firm needs to produce at a specific price d. limiting sales to those who are first in line when the product is distributed e. relating the actions and decisions of buyers and sellers in the market