Whenever the absolute value of the price elasticity of demand is greater than 1, but less than infinite
A) demand is inelastic.
B) demand is unit elastic.
C) demand is elastic.
D) demand is perfectly elastic.
Answer: C
You might also like to view...
Despite the Obama administration's support of the Trans-Pacific Partnership (TPP), the AFL-CIO labor union has argued that the TPP will not
A) protect the environment. B) ensure safe imports. C) create jobs. D) all of the above
Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. She has an effort cost of C = e2 and a reservation wage of $1,500 so that her compensation package is W = 1,500 + 0.2 Q, where the CEO sets the incentive at 0.2 and Q = 200 e. Here effort is known only by the employee. There is a random shock to output each period whose mean is zero. (a) What is the optimal effort for Mary Sue Nelson? (b) On average, what total wage or salary will she earn each month? (c) On average, what is the output of sales contracts that she makes? (d) On average, what kind of profit will the CEO earn off of Nelson's work?
What will be an ideal response?
An increase in the unemployment rate would be shown on a production possibilities curve by
A. shifting the entire curve outward. B. shifting the entire curve inward. C. moving from a point on or near the curve to a point closer to the origin, rather than shifting the entire curve. D. moving from a point inside the curve to a point on the curve, rather than shifting the entire curve.
An economic rationale for government protection of small investors is that:
A. many small investors cannot adequately judge the soundness of their bank. B. there is inadequate competition to ensure a bank is operating efficiently. C. banks are often run by unethical managers who will often exploit small investors. D. large investors can better afford losses.