Luxury items tend to have ________ demand, and necessities tend to have ________ demand.
A. relatively inelastic; elastic
B. perfectly elastic; perfectly inelastic
C. unit elastic; perfectly inelastic
D. relatively elastic; inelastic
Answer: D
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?Each economic model can be applied to many different real-world problems.
Answer the following statement true (T) or false (F)
Over time, technology tends to:
A. set countries apart in terms of productivity. B. allow developing nations to experience the "catch-up" effect. C. diminish in nations that are still developing. D. spread from country to country, equalizing opportunity costs.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
Refer to the supply and demand graph below. S1 and D1 represent the current market supply and demand, respectively. S2 and D2 represent the socially optimal supply and demand. The positions of the graphs indicate that there is (are):
A. External benefits from production and external costs from consumption of the product
B. External costs from production and external benefits from consumption of the product
C. External benefits from production and consumption of the product
D. External costs from production and consumption of the product