If a 5 percent change in the price of a good elicited a 5 percent change in the quantity demanded of the good, we would say that over this range of prices the good has a(n)
A) elastic demand.
B) inelastic demand.
C) perfectly elastic demand.
D) unit elasticity of demand.
D
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Since price tends to equal total utility, the price of water is low and the price of diamonds is high.
Answer the following statement true (T) or false (F)
Successful advertising by a monopolist will
A. reduce the gap between the monopoly and competitive output. B. increase the gap between the monopoly and competitive output. C. cause the monopolist to overproduce. D. cause the monopolist to decrease output.
Suppose the economy was in equilibrium, and the national government increased spending by $200 billion. Monetarist theory would predict that the main factor that will readjust the economy is the:
a. Nominal and real exchange rates. b. Real risk-free interest rate. c. Real wage rate. d. Money supply. e. Price level.
Foreign exchange rates refer to the:
A. Price at which purchases and sales of foreign goods take place B. Rate of exchange of goods and services between two trading nations C. Price of one nation's currency in terms of another nation's currency D. Difference between exports and imports of a particular nation with another