Income elasticity is defined as the
A) percentage change in the quantity demanded of a good resulting from a change in income.
B) percentage change in the demand of a good resulting from a one percent change in income.
C) change in quantity demanded resulting from a change in income.
D) percentage change in the quantity demanded of a good resulting from a one percent change in income.
B
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A Classical aggregate supply curve is
A) vertical. B) upward-sloping. C) horizontal. D) downward-sloping.
The difference between the short-run and the long-run is
A) three months, or one business quarter. B) the time it takes for firms to change all inputs in the production process. C) the time it takes for firms to change only their variable inputs. D) More information is required to answer this question.
Payments to Social Security recipients would decline if the retirement age were lowered.
Answer the following statement true (T) or false (F)
A public transit company finds that when it reduces the price of a bus ticket, total revenues remain the same. One can conclude from this that:
a. the demand curve is horizontal, reflecting infinite price elasticity. b. the company sells the same number of bus tickets both before and after the price change. c. the demand curve for bus tickets must have shifted to the right. d. the firm is operating in a range of the demand curve that is unit elastic. e. the price should be lowered further so that a larger quantity can be sold.