Recall the Application regarding the elasticity of demand for public transit varying over time to answer the following question(s).According to the Application, the demand for public transit is:
A. more elastic in the long run because riders have time to respond to changes in price.
B. less elastic in the long run because consumers have less opportunity to change their behavior.
C. is perfectly inelastic and does not vary over time.
D. is perfectly elastic and does not vary over time.
Answer: A
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A. 4; 6 B. 1; 3 C. 1; 4 D. 4; 7
A German tourist visits Disney World in Orlando; the expenditures made by the German tourist are included in U.S. GDP
Indicate whether the statement is true or false
One of the potential consequences of the public debt is that it may:
A. Make income distribution more equitable B. Increase the debt burden of foreign creditors C. Lead to additional future taxes that reduce economic incentives D. Decrease interest rates and increase investment spending
When the price of candy bars decreased from $0.55 to $0.45, the quantity demanded changed from 19,000 per day to 21,000 per day. In this price range, the price elasticity of demand (based on the midpoint formula) is
A. -0.5. B. -0.2. C. -1. D. -2.