Price elasticity of demand measures
A) how responsive suppliers are to price changes.
B) how responsive sales are to changes in the price of a related good.
C) how responsive quantity demanded is to a change in price.
D) how responsive sales are to a change in buyers' incomes.
Answer: C
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Keynesian economists link the start of the Great Depression to the drop in construction spending and the downturn in consumption following the stock market crashes of 1929
Indicate whether the statement is true or false
According to the life-cycle hypothesis, MPCs will
a. be relatively low for young adults, rise during middle age, and then rise again near or in retirement b. be relatively high for young adults, fall during middle age, and then rise again near or in retirement c. be relatively high for young adults, fall during middle age, and then fall again near or in retirement d. be relatively low for young adults, rise during middle age, and then fall again near or in retirement e. remain relatively constant over a person's life cycle
If a country's income level is high:
A. it must be well-endowed with natural resources. B. it must have a high level of growth. C. it usually has a high level of GDP per capita. D. All of these are true.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.