When the price of sugar was "low," U.S. consumers spent a total of $3 billion annually on sugar consumption. When the price doubled, consumer expenditures remained at $3 billion annually. This data indicates that:
A. the demand for sugar is inelastic.
B. the quantity demanded of sugar increased.
C. the demand curve for sugar is upward sloping.
D. None of the statements is correct.
Answer: D
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The table above gives data for the nation of Mosh. If real GDP is $6 trillion, then
A) firms increase production because inventories are less than their target levels. B) the economy has reached equilibrium and no change in production will occur. C) firms increase production because inventories exceed their target levels. D) firms decrease production because inventories exceed their target levels. E) We need more information to determine whether firms increase, decrease, or do not change their production.
Exhibit 36-1 Bond FaceValueof Bond Price ofthe Bond Annual CouponPayment A $1,000 $850 $25 B $1,000 $950 $41 C $1,000 $1,100 $52 D $1,000 $1,100 $32 E $1,000 $1,000 $50 Refer to Exhibit 36-1. The yield on bond A is approximately
A. 2.9 percent. B. 0.03 percent. C. 2.5 percent. D. 0.02 percent.
The use of strategic bombing by the Allies during World War II:
a. caused a marked decrease in Axis munitions production. b. caused Germany to divert significant resources to air defense. c. used the various air forces as an aid to the ground or sea forces. d. was intended to attack the civilian population. e. Only b and d are correct.
When is debt financing most likely to harm future generations of Americans?
a. When the debt is held by domestic investors. b. Any time the debt is held by foreign investors. c. When the debt is held by foreign investors and the funds are channeled into productive investment projects. d. When the debt is held by foreign investors and the funds are used to finance either current consumption or unproductive investments.