An elastic response in the quantity of a good demanded would be caused by
A) the availability of many substitutes.
B) a lack of substitutes.
C) a lack of sensitivity to the good's price.
D) the good representing a small portion of a person's budget.
A
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Use the following graph for a competitive market to answer the question below.
Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from S1 to S2. The amount of the tax paid by the seller is
A. $2.25. B. $0. C. $1.00. D. $1.25.
If the central bank targets the interest rate, it
a. must decrease interest rates in response to an increase in money demand. b. rules out the possibility of runaway inflation. b. can lead to runaway inflation if maintained too rigidly. d. Both a and c e. Both b and c
A game is:
A. a situation in which each member of a group makes at least one decision and cares both about his own choice and about others' choices. B. describes a situation in which strategy plays a role. C. provides the foundation for understanding competition in industries with only a few producers. D. All of these are correct.
If the price elasticity of demand is between -1 and - , then demand is inelastic
a. True b. False Indicate whether the statement is true or false