Which of the following is associated with high price elasticity of demand?
a. Luxury goods
b. A very short time period for consumers to respond to price changes
c. Many close substitutes
d. Low share in consumer's budget
c
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At the end of last year, the CPI equaled 120. At the end of this year, the CPI equals 132. What is the inflation rate over this year?
A) 6 percent B) 10 percent C) 12 percent D) None of the above answers are correct because more information is needed to calculate the inflation rate.
Continuing with the same vacation-insurance company from the preceding question, is there any vacation-day price that would both strictly increase the family's expected utility (compared to no insurance) and strictly increase the profits of the risk-neutral insurance company?
a. No. b. Yes, 3 or 4. c. Yes, 4. d. Yes, 4 or 5.
Why is a college graduate more likely to get a job in management than is someone with only a high school diploma, even when the job has nothing to do with a specific type of education?
Which statement is false?
A. According to the theory of the dual labor market, the rich stay rich and the poor stay poor. B. The dual labor market theory does not account for the huge middle level of occupations—such as nursing, teaching, and social work. C. Most poorer people tend to find jobs in the primary labor market, according to the theory of the dual labor market. D. None of the statements are false.