When a household spends over 70% of its monthly income on a good, demand will be
A) elastic.
B) unit-elastic.
C) inelastic.
D) elastic, unit-elastic or inelastic depending upon supply.
Answer: A
You might also like to view...
Assume a firm is run as a zero-profit enterprise. Which of the following would be true?
A) There is a higher probability that wage reductions would outweigh layoffs. B) Those in charge would not act any different than regular owners, there would still be layoffs. C) Those not in charge would remain risk neutral. D) Wage reductions would be lower than they would be if the firm was run for profit.
Firms look for dominated strategies in order to gain the upper hand on competitors
Indicate whether the statement is true or false
An increase in human capital would lead to
a. a decrease in the standard of living b. an upward shift of the production function c. a decrease in productivity d. cutbacks in government skill-training programs e. a decrease of the capital stock
Which of the following is most characteristic of developing nations?
A. A small percentage of the labor force in agriculture B. A relatively equitable distribution of income C. Low levels of labor productivity D. Low rates of population growth