If the price elasticity of demand is elastic, then:
a. Ed < 1.
b. there are likely a large number of substitute products available.
c. an increase in the price will increase total revenue.
d. consumers are s not very responsive to a price increase.
b
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The phenomenon which occurs when markets do not produce the most efficient outcome on their own is known as
A) market failure. B) imperfect information. C) economic certainty. D) public goods.
When advertising enhances the ability of markets to allocate resources, it is most likely: a. manipulating people's tastes
b. increasing the brand loyalty of existing customers. c. advertising about the existence of new products. d. addressing psychological, rather than informational, characteristics of a good.
For a given change in demand: a. Quantity will change relatively more in the long run than the short run. b. Quantity will change relatively more in the short run than the long run. c. Price will change relatively more in the long run than the short run
d. Both b. and c. are true.
The price of a new car is $40,000 while the price of a five-year old car of the same brand is $16,000. The next year the price of the new car increases to $44,000 and the price of a five-year old car of the same brand is $17,600. The relative price of
the used car A) decreased by $2,400. B) decreased by 10 percent. C) increased by 10 percent. D) remained constant at 0.4.