After full adjustment to a price change has occurred, the absolute price elasticity of demand for an item is equal to 1. In the short run, the absolute price elasticity of demand for the item was probably
A) less than 0.
B) greater than 0.
C) less than 1.
D) greater than 1.
C
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The figure above shows the production possibilities frontier for a country. In order for it to move from producing at point A to producing at point B, the country would need to incur an opportunity cost of
A) 4 million SUVs. B) 3 million SUVs. C) 1 million SUVs. D) 3 million compact cars. E) 0 because the gain in compact cars exceeds the loss in SUVs.
If monetary policy is used to control GDP, there is greater sacrifice of long-run economic growth in pursuing short-run stabilization the ________ is fiscal policy and thus the ________ is the real interest rate
A) tighter, higher B) tighter, lower C) easier, higher D) easier, lower
In 1992, Britain and Italy __________ the European Monetary System and __________ against the other major European currencies
A) joined; fixed their currency B) joined; let their currency float C) left; fixed their currency D) left; let their currency float
Refer to Figure 10.3. A negative demand shock accompanied by an increase in the real interest rate is best represented by ________ in panel (a) and ________ in panel (b)
A) a shift from AE3 to AE2; a movement from point C to point B B) a shift from AE2 to AE3; a shift from IS1 to IS2 C) a shift from AE2 to AE1; a movement from point B to point A D) a shift from AE3 to AE1; a movement from point C to point A