In general, elasticities measure
A) the change in quantity demanded when a product attribute changes.
B) the change in consumer spending when income changes.
C) the change in an attribute for a percentage change in price.
D) the percentage change in the quantity demanded resulting from a fixed percentage change in some attribute.
D
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When Lonnie produces 1 pair of cowboy boots his costs total $300. When he produces 2 pairs of cowboy boots his total costs are $500. This means that Lonnie's marginal cost of producing the second pair of cowboy boots is $200
Indicate whether the statement is true or false
The inputs used to produce cupcakes (e.g., flour, sugar, butter, and labor) are also used to produce cookies, cakes, muffins, pies and many other goods. This suggests that:
A. the elasticity of supply of cupcakes is relatively high. B. the elasticity of supply of cupcakes is relatively low. C. the supply curve for cupcakes is downward sloping. D. cupcakes are a normal good.
Figure 10-1
If the price level in Figure 10-1 were 120,
a.
there would be excess goods on the market.
b.
firms would have to raise their prices.
c.
inventories would be disappearing.
d.
aggregate quantity demanded would exceed aggregate quantity supplied.
If the expected profitability of a business activity increased we might expect investment spending to:
A. remain constant. B. decrease. C. increase. D. there is not enough information to determine what would happen.