The price elasticity of demand for a specific model of a luxury car is likely to be
A) elastic.
B) inelastic.
C) 0.
D) infinite.
A
You might also like to view...
A given sum of money received each year for a specific number of years is called a(n)
a. bond b. perpetuity c. debt d. discount e. annuity
In the classical model with an open economy, an increase in government purchases may not cause complete crowding out, but crowding out will be complete worldwide
a. True b. False
Suppose that due to a drought, the price of agricultural goods rises. If land is specific to agriculture, capital is specific to manufacturing, and labor is mobile between sectors, which of the following is TRUE?
a. The percentage change in labor income is less than zero. b. The percentage change in labor income is greater than the percentage change in the relative price of agricultural goods. c. The percentage change in labor income is greater than the percentage change in the relative price of manufacturing goods. d. The percentage change in labor income is less than the percentage change in the relative price of agricultural goods.
An aggregate supply curve may be horizontal over some range because within that range
A) a higher price level leads to higher interest rates, which reduce the money supply and consumer spending B) changes in the aggregate price level do no induce substitution C) output cannot be increase unless prices and interest rates increase D) rigid prices prevent employment from fluctuating E) resources are underemployed and an increase in demand will be satisfied without any pressure on the price level