Suppose you observe that minor changes in supply seem to cause dramatic changes in price with only slight changes in the amount sold, you would conclude that
A. demand is inelastic.
B. demand is elastic.
C. demand is perfectly inelastic.
D. demand is unit elastic.
Answer: A
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Based on the data in the table above, ice cream and cake are ________ goods
A) inferior B) normal C) substitute D) complementary E) Both answers B and D are correct.
Vaccinations tend to result in a negative externality
Indicate whether the statement is true or false
Macroeconomists are interested in how consumers respond to changes in the market real interest rate because
A) interest rates are an important channel for the effects of monetary and fiscal policies. B) substitution effects and income effects net out in the aggregate. C) of the permanent income hypothesis. D) future income affects current consumption.
Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:
A. Gertie should buy the jeans because the price is less than her reservation price. B. Gertie should buy the jeans because the price is more than her reservation price. C. Gertie should not buy the jeans because the price is not equal to her reservation price. D. Gertie should not buy the jeans because they will be of lower quality than she expected.