If the market for a product is broadly defined, then
A) the good has many complements.
B) there are few substitutes for the product and the demand for the product is relatively inelastic.
C) there are many substitutes for the product and the demand for the product is relatively elastic.
D) the expenditure on the good is likely to make up a large share of one's budget.
Answer: B
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Average product of labor is equal to ________
A) total product multiplied by the quantity of labor employed. B) the total product produced C) the quantity of labor employed divided by total product D) total product divided by the quantity of labor employed
In the short run with predetermined prices, when output is less than aggregate expenditure, firms will:
A. reduce production. B. decrease aggregate expenditure. C. increase aggregate expenditure. D. increase production.
Stating that income elasticity of demand for potatoes equals 0.15 is equivalent to stating that if income
A) decreases by 10 percent, potato purchases decrease by 1.5 percent. B) increases by 10 percent, potato purchases increase by 15 percent. C) decreases by 1.5 percent, potato purchases decrease by 10 percent. D) increases by 15 percent, potato purchases decrease by 10 percent. E) none of the above
Steve and Karen decide to watch a movie on Netflix using a promotion code so they do not need to pay for that movie. We know that
A) both bear the same opportunity cost because they are seeing the same thing. B) both bear the same opportunity cost because the tickets have the same face value. C) both bear an opportunity cost that depends on what each person is giving up to watch the movie. D) neither bears an opportunity cost since neither needs to pay for the movie.