Refer to Figure 20.2. Suppose the areas 0P1AB and 0P2CD are equal. We can conclude that the price elasticity of demand between point A and point C is
A. Inelastic.
B. Unitary elastic.
C. Elastic.
D. Impossible to determine. It depends on whether the price has increased or decreased.
Answer: B
You might also like to view...
You can spend $10 for lunch and you would like to purchase two cheeseburgers. When you get to the restaurant, you find out the price for cheeseburger has increased from $5 to $6, so you decide to purchase just one cheeseburger. This is best described as:
A. the income effect of a price change. B. a decrease in the buyer's reservation price. C. the substitution effect of a price change. D. an increase in the buyer's reservation price.
To be part of the supply for a good, a producer must be
A) only willing to supply the good. B) only able to supply the good. C) both able and willing to supply the good. D) both able and willing to supply the good, and have already identified a buyer. E) both able and willing to supply the good, and have already sold the good.
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.
Asset price bubble is an increase in the price of assets that goes far beyond what can be justified by improving the fundamentals.
Answer the following statement true (T) or false (F)