Assume that we have a demand curve of the form: log(Q) = a - b log(P) + c log(I) where Q = quantity, P = price, I = income, and a, b, and c are positive constants
The income and price elasticities for the demand curve represented above are always A) equal to one.
B) equal to zero.
C) equal (i.e., income elasticity always equals price elasticity).
D) constant but not necessarily equal to one another.
D
You might also like to view...
If a female supervisor is discriminated against by one of her workers who refuses to cooperate, she may earn lower wages.
Answer the following statement true (T) or false (F)
Which of the following groups of words best represents macroeconomic goals?
A.) Full employment, price stability, economic growth. B.) Rate of production, choice of factors of production, and the pricing of specific goods. C.) Welfare of individual consumers and business firms. D.) Land, labor, and capital.
Refer to the graph shown. The output range in region b is associated with:
A. diseconomies of scale. B. diminishing marginal productivity. C. constant returns to scale. D. economies of scale.
Variable inputs are defined as any resource that:
A. varies with the size of the firm's plant. B. cannot be changed as output changes. C. can be changed as output changes. D. can be increased or decreased hourly.