The price elasticity of demand shows
A) the relationship between market price and household income.
B) the proportionate amount by which the quantity demanded changes in response to a proportionate change in price.
C) the quantity demanded at a given price.
D) the proportionate amount by which the price changes in response to a proportionate change in quantity demanded.
Answer: B
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A downward shift in the Fed's reaction function is equivalent to:
A. an increase in the Fed's long-term target for inflation. B. a downward shift of short-run aggregate supply C. an upward shift of short-run aggregate supply D. a decline in the Fed's long-term target for inflation.
In an economic model of consumer behavior, rational self-interest would likely be
a. a key variable b. the hypothesis of the model c. a behavioral assumption d. a prediction of the model e. a method of testing the model
Imitation as a strategy for acquiring new technology is based on the difference in effort between
a. creating it and thinking of it. b. creating it and looking it up. c. looking it up and writing it down. d. discovering it and innovating it.
The principal result of the rising value of the U.S. dollar in the mid-1990s was a(n)
a. balance of payments deficit. b. balance of payments surplus. c. increase in the rate of inflation. d. increase in the unemployment rate.