Exhibit 5-5 Demand curve for computers
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In Exhibit 5-5, the change in total revenue resulting from a change in price from A to D indicates that the demand curve is:
A. elastic.
B. inelastic.
C. unitary elastic.
D. nonelastic.
Answer: A
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What happens to U.S. GDP when foreign countries experience prosperity?
A) It increases because the United States will export more product to those countries. B) It does not change because U.S. GDP is not affected by other countries' prosperity. C) It decreases because the foreign countries will be able to export more at a lower cost. D) It decreases because the foreign countries will now buy more of their own products.
If a perfectly competitive industry is monopolized, consumer surplus
a. can be expected to decrease b. will usually remain constant c. can be expected to increase d. drops from a high value to zero e. increases from zero to a high value
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.
In economics, scarcity refers to the situation of:
A) optimizing with the use of limited information. B) having more wants than the amount of available resources. C) rationing of available goods and services by the government. D) sellers setting the prices of their products too high for people to be able to afford them.