Which of the following would result in a higher absolute value of the price elasticity of demand for a product?
A) The time period under consideration is short.
B) The good is a necessity.
C) The expenditure on the good is small relative to one's budget.
D) A wide variety of substitutes are available for the good.
D
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Lowering the corporate income tax rate ________ the user cost of capital, which ________ investment
A) raises, depresses B) raises, stimulates C) lowers, depresses D) lowers, stimulates
There is essentially no risk of default for U.S. government securities
a. True b. False Indicate whether the statement is true or false
Compared to the 1910-1960 period, during the past 50 years the severity of macroeconomic fluctuations has
a. increased. b. decreased. c. changed little. d. increased, but the general level of prices has been more stable.
Imagine Tom's annual salary as an assistant store manager is $30,000, he owns a building that rents for $10,000 yearly, and his financial assets generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. What are Tom's accounting profits?
A. $50,000 B. -$6,000 C. $24,000 D. $35,000