Which of the following is NOT a determinant of consumer demand?
a. tasters and preferences
b. household income
c. the state of technology
d. prices of related goods
Answer: c. the state of technology
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What is the most likely effect of the development of cell phones (many use this for time also) on the watch industry?
a. Increased price elasticity of demand for the watch industry because cell phones are complements b. decreased price elasticity of demand for the watch industry because cell phones are complements c. Increased price elasticity of demand for the watch industry because cell phones are substitutes d. decreased price elasticity of demand for the watch industry because cell phones are substitutes
Which of the following statements is correct?
a. The demand for natural gas is more elastic over a short period of time than over a long period of time. b. The demand for smoke alarms is more elastic than the demand for Persian rugs. c. The demand for bourbon whiskey is more elastic than the demand for alcoholic beverages in general. d. All of the above are correct.
When demand is perfectly inelastic, the price elasticity of demand
a. is zero, and the demand curve is vertical. b. is zero, and the demand curve is horizontal. c. approaches infinity, and the demand curve is vertical. d. approaches infinity, and the demand curve is horizontal.
Market failure happens when a market does not generate the most efficient outcome.
Answer the following statement true (T) or false (F)