Related to the Economics in Practice on page 102: Which of the following best explains why demand is often less elastic in the short run than it is in the long run?
A. In the short run, consumers have less access to substitutes.
B. Consumers tend to postpone making purchasing decisions as long as possible.
C. In the short run, prices can change rapidly, but in the long run they are more stable.
D. When demand is elastic, price increases reduce revenue because a small price increase will lead to a large decrease in quantity demanded.
Answer: A
You might also like to view...
Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. 
Suppose Acme and Mega decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Mega cheats on the agreement by reducing its price to $1 while Acme continues to comply with the collusive agreement, then Mega's economic profit will be ________.
A. $150 B. $200 C. $75 D. $100
Why do people often tend to take risks if they are insured?
What will be an ideal response?
If one dollar is initially equal in value to one euro and demand for euros increases, then each dollar will be worth
a. more than one euro, and European imports will be cheaper in the United States b. less than one euro, and European imports will be more expensive in the United States c. more than one euro, and European imports will be more expensive in the United States d. less than one euro, and European imports will be cheaper in the United States e. the same as the euro, and there will be no change in the values of imports or exports
Direct foreign investment in the LDCs
a. explains whatever economic growth the LDCs had in the last quarter of the 20th century b. pushes the production possibilities curve inward toward the origin because resources are being diverted from the LDCs' own production activities c. leads to substantial LDC debt to rich nations d. cannot help the LDCs and can actually hinder their development because LDCs become reliant on it e. can help the LDCs but cannot be a substitute for their own development efforts