If the price elasticity of demand for a product is unity, a decrease in price will:
A. have no effect upon the amount purchased.
B. increase the quantity demanded and increase total revenue.
C. increase the quantity demanded but decrease total revenue.
D. increase the quantity demanded, but total revenue will be unchanged.
Answer: D
You might also like to view...
Imagine two cities, Hometown and Visitorsville, where the rich, middle, and poor income recipients in one city have annual incomes identical to their counterparts' incomes in the other city. In Hometown, the poorest families one year almost always end up as the richest families the next year and become middle-income families the year after that. In Visitorsville, however, the poor remain poor and
the rich remain rich. Which of the following is true about the two cities? a. Annual data on the distribution of income will indicate that the degree of income inequality in the two cities is identical. b. The degree of lifetime income inequality in the two cities is identical. c. The income mobility of people in the two cities is identical. d. The distribution of annual income is more unequal in Visitorsville.
An increase in supply will cause
What will be an ideal response?
Temporary changes in the price level caused by changes in the business cycle are called:
A. demand push inflation. B. cost push inflation. C. demand pull inflation. D. cost pull inflation.
What are the effects of a minimum wage set below the equilibrium wage?
What will be an ideal response?