Refer to the information provided in Figure 5.2 below to answer the question(s) that follow.
?Figure 5.2Refer to Figure 5.2. At Point C the price elasticity of demand is -1. Along line segment EC of the demand curve, the demand is
A. unit elastic.
B. elastic.
C. inelastic.
D. either elastic or inelastic, depending on whether price increases or decreases.
Answer: C
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In a small economy, consumption spending is $6,000, government spending is $1,200, gross investment is $1,500, exports are $2,000, and imports are $1,000. What is gross domestic product?
A) $9,700 B) $9,800 C) $10,800 D) $11,700
The concerns about the 2009 $787 billion stimulus by the Obama Administration were that
a. it was too small. b. it was too large. c. it was not well designed. d. Some economists opposed any stimulus whatsoever. e. All of the above.
If a $500 tax is placed legally (statutorily) on the buyers of new couches and as a result the price of couches at stores rises by $200, the actual burden of the tax
a. falls completely on couch buyers. b. falls completely on couch sellers. c. is $200 on couch buyers and $300 on sellers. d. is $300 on couch buyers and $200 on sellers.
Ryan experiences an increase in his wages. The hours of labor that he supplies to the market would increase if
a. the income effect is larger than the substitution effect. b. the substitution effect is larger than the income effect. c. neither the income effect nor the substitution effect apply to Tom's labor-leisure tradeoff. d. Ryan views both labor and leisure as inferior goods.