The coefficient of the price elasticity of demand is always negative
a. True
b. False
Indicate whether the statement is true or false
True
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The law of demand is based on the observation that
A) people buy less of a product when the product becomes less fashionable. B) people buy more of a product when the price falls. C) people are indifferent to price changes. D) stores go out of business if they lower prices.
Other things equal, which of the following might shift the demand curve for gasoline to the left?
A. The development of a low-cost electric automobile B. An increase in the price of train and air transportation C. A large decline in the price of automobiles D. The discovery of vast new tar sands oil reserves in Canada
A Wall Street Journal headline reads: "Cigar Shortage Draws New Brands into Market." The shortage resulted from a renewed interest in smoking cigars. What best describes facts behind the headline?
A. Demand has shifted to the right and price has risen to equilibrate supply and demand. B. Supply has shifted to the left. Price has risen somewhat, but not enough to equilibrate supply and demand. C. Demand has shifted to the right. Price has risen somewhat, increasing quantity supplied, but not enough to equal quantity demanded. D. Supply has shifted to the right. Price has fallen somewhat, but not enough to equilibrate supply and demand.
Which of the following will definitely occur when there is a decrease in demand for and an increase in supply of potato chips?
A. an increase in equilibrium quantity B. a decrease in equilibrium quantity C. a decrease in equilibrium price D. an increase in equilibrium price