When the absolute price elasticity of demand is greater than 1, demand is
A) elastic.
B) unit-elastic.
C) inelastic.
D) undetermined without more information.
A
You might also like to view...
Which of the following is a limitation of discretionary fiscal policy?
i. law-making lags ii. estimating potential GDP iii. income gap A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
Refer to Figure 9-1. Based on the graph of the labor market above, if a minimum wage is set at $5 per hour, which of the following will occur?
A) The level of unemployment will rise, but the percentage of the labor force unemployed will not change. B) The unemployment rate will fall. C) The unemployment rate will rise. D) None of the above will occur.
Profits of a monopoly are driven to zero
a. In the long-run as all assets are mobile in the long-run b. Immediately in the short-run as assets move from low-valued uses to high-valued uses instantly c. In the long run because the demand curve becomes more inelastic d. In the short run because the demand curve becomes more elastic
Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. If the price of a round of golf drops to $20, the income effect:
A. predicts Sam will increase his consumption of both golf and tanning sessions. B. predicts Sam will double his consumption of golf. C. predicts Sam will consume more golf and less tanning sessions. D. predicts Sam will consume less golf and more tanning sessions.