If the price of a good falls by 10% and the percentage decrease in the total amount consumers spend on the good is 5%, then the good is
A. elastic.
B. unit elastic.
C. perfectly inelastic.
D. inelastic.
Answer: D
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Short-run aggregate supply is greater than long-run aggregate supply in the misperceptions theory if
A) the actual price level is greater than the expected price level. B) the actual price level equals the expected price level. C) the actual price level is less than the expected price level. D) output is less than its full-employment level.
Recipients of Medicare tend to demand a greater quantity of low-value, high-cost services because
A) the services are readily available. B) recipients are coerced into demanding such services. C) the government mandates that they demand such services. D) the services are heavily subsidized.
Suppose that John Maestro, the owner of a tennis shop in Evanston, Illinois, decides to purchase a new machine that restrings tennis rackets in half the time it formerly took. The new technology costs $1,000 . and the MPC is 0.80 . How much real GDP will be generated from John's $1,000 initial investment?
a. $200 b. $500 c. $1,000 d. $2,000 e. $5,000
How have U.S. imports and exports, as a fraction of GDP, changed from 1970 to the present?
What will be an ideal response?