Which of the following tends to make demand for a good more elastic?
a. A reduction in the number of substitutes for the good.
b. Consumers have a long time to adjust to a price change.
c. The amount spent on the good is a small proportion of the consumer's budget.
d. The good is broadly defined.
e. The good is a necessity.
B
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If the market in the figure above is a profit-maximizing single-price monopoly, consumer surplus is the area ________
A) ABH B) BFGH C) ACG D) BCD E) ACE
A factor of production that cannot be used outside of a particular sector of an economy is a(an)
A) specific factor. B) mobile factor. C) variable factor. D) import-competing factor. E) export-competing factor.
The net result of deflation is to:
A. reduce the level of aggregate demand in the economy. B. increase the level of aggregate demand in the economy. C. be neutral and not affect the aggregate demand in the economy. D. reduce the level of aggregate supply in the economy.
If income elasticity of demand for food is 1.55 it follows that
A) a 10 percent rise in the price of food lowers the quantity demanded of food by 15.5 percent. B) if income rises by 10 percent, consumption of food rises by 15.5 percent. C) if income rises by 10 percent, consumption of food falls by 15.5 percent. D) a 1 percent rise in the price of food decreases the quantity demanded of food by 1.55 percent. E) none of the above