Answer the following statements true (T) or false (F)
1. The demand for necessities and goods that require a small expenditure tends to be price inelastic.
2. If total revenue decreases when a price is decreased, the demand for the commodity is elastic.
3. If the coefficient of elasticity for a commodity is 1.5 and the price of that commodity is raised, total revenue will decrease.
4. The slope of a demand curve is a measure of elasticity.
5. The demand for a fur coat tends to be more price elastic than the demand for automobile tires.
1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. TRUE
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Figure 4.3 illustrates the demand for tacos. An increase in price of tacos would bring about a movement from
A) point a to point c. B) point c to point a. C) D2 to D0. D) D0 to D1.
The production function displays
A) normal returns. B) increasing returns. C) diminishing returns. D) average returns. E) real returns.
Jack was unemployed two weeks ago but just started a new job. As a result of this increase in the number of employed workers, which of the following occurred?
A) The labor force participation rate increased. B) The unemployment rate decreased. C) The unemployment rate increased. D) The labor force participation rate decreased.
Instruments which provide payments to holders of bonds in the event of default are known as ________
A) collateralized bond obligations B) tertiary payment devices C) credit default swaps D) mortgage-backed securities