Demand is more inelastic for an item which is a luxury as compared to an item which is a necessity.
Answer the following statement true (T) or false (F)
False
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Why is it that if an industry is operating under conditions of internal scale economies then the resultant equilibrium cannot be consistent with the pure competition model?
What will be an ideal response?
The ability of increasing quantity supplied in response to a higher price is identical across industries
a. True b. False
If a nation's real interest rate fell relative to foreign nations, it would cause net exports to:
a. Fall. b. Rise. c. Remain unchanged. d. It could increase or decrease net exports, depending on the elasticity of demand for foreign exchange.
Suppose a Dell computer that sells for $2,000 in the U.S. is exported to the Netherlands. If the exchange rate is 2 Dutch guilders per U.S. dollar, then according to purchasing power parity theory, what would be the Dutch guilder price of the computer in the Netherlands?
a. 5000 guilders b. 1000 guilders c. 2000 guilders d. 4000 guilders