Consider a good with a price elasticity equal to 1 at every point on its demand curve. Which of the following statements is correct?
a. Total revenue always rises exactly in proportion to a drop in the price.
b. Total revenue always rises exactly in proportion to a rise in the price.
c. Total revenue does not change if the price changes.
d. Total revenue drops to zero whenever the price rises.
e. Total revenue always doubles if the price drops.
C
You might also like to view...
If a nation follows a policy of being self-sufficient, its:
a. production possibilities equal its consumption possibilities. b. consumption possibilities are greater than its production possibilities. c. production possibilities curve shifts rightward. d. consumption possibilities are less than its production possibilities.
Suppose that the government is considering a policy to combat unemployment. If the government pays for increased spending by borrowing funds that otherwise would have been used for consumption and investment,
a. the positive effect of increased government spending is augmented by an increase in private spending. b. the negative effect of increased government spending is offset by an increase in private spending. c. the negative effect of increased government spending is augmented by a reduction in private spending. d. the positive effect of increased government spending is offset by a reduction in private spending.
Which of the following is a major reason for offshoring?
a. The gradual reduction in information and communication technologies. b. The fragmentation of production processes. c. The gradual decline in worldwide competition. d. All of the above are major reasons for offshoring.
Crowding in occurs when government spending, by raising Real GDP, induces increases in private investment spending.
Answer the following statement true (T) or false (F)