The price elasticity of demand for alfalfa is perfectly elastic. Thus, the price elasticity demand for alfalfa is
A. 1.0.
B. 0.0.
C. -1.0.
D. infinity.
Answer: D
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In 2009, Congress passed tax laws to reduce income tax rates for some taxpayers. This action is called
A) a discretionary fiscal policy. B) a discretionary revenue policy. C) an automatic fiscal policy. D) an annual tax policy. E) induced tax policy.
The income effect of a price change refers to
A) the change in demand that occurs when both income and price change. B) the change in demand that occurs when consumer income changes. C) the change in the quantity demanded of a good that results from the effect of a change in price on consumer purchasing power, holding everything else constant. D) the change in the quantity demanded that results from a change in price, making the good more or less expensive relative to other goods, holding everything else constant.
Everything else held constant, when real estate prices are expected to decrease
A) the demand curve for bonds shifts to the left and the interest rate rises. B) the demand curve for bonds shifts to the left and the interest rate falls. C) the demand curve for bonds shifts to the right and the interest rate falls. D) the supply curve for bonds shifts to the right and the interest rate falls.
Studies of human decision-making have detected systematic mistakes that people make. Which of the following have been detected?
a. people are overconfident b. people give too much weight to a small number of vivid observations c. people are reluctant to change their minds d. All of the above are correct.