If the percentage change in the quantity demanded of a good is less than the percentage change in price, price elasticity of demand is:
a. elastic.
b. inelastic.
c. perfectly inelastic.
d. unitary elastic.
b
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
In a closed economy:
A) consumption is equal to zero. B) investment is equal to zero. C) government spending is equal to zero. D) net exports is equal to zero. In a closed economy, without the government, the consumption expenditure equals $5,000 and the investment expenditure equals $2,000.
What is an efficiency wage and what effect does it have in the labor market?
What will be an ideal response?
If aggregate demand falls short of current output, business firms will ________ production to ________ inventories
A) cut; keep from accumulating B) expand; keep from accumulating C) cut; build up D) expand; build up