If the price of milk rises, when is the price elasticity of demand likely to be the lowest?
a. immediately after the price increase
b. one month after the price increase
c. three months after the price increase
d. one year after the price increase
a
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Any combination of two goods that lies beyond the production possibilities frontier
A) is currently impossible to produce. B) is currently possible to produce, but not worth trying. C) represents economic waste. D) represents a more efficient combination of output than anything lying on the frontier.
Answer the following statement(s) true (T) or false (F)
1. The Clean Air Interstate Rule (CAIR) included an annual SO2 trading program. 2. NOX contributes both to acid rain and to the formation of ground-level ozone. 3. Because NOX readily moves across state borders, a series of interstate collaborations formedover time to address the problem, but none established a trading program. 4. Two new NOX cap-and-trade programs were launched under the Clean Air Interstate Rule (CAIR). 5. RECLAIM is a California trading program that used trading credits in a regional market for sulfur oxide and nitrogen oxide.
A Giffen good is one for which the quantity demanded rises as the price rises because the income effect
a. reinforces the substitution effect. b. reinforces and is greater than the substitution effect. c. counteracts but is smaller than the substitution effect. d. counteracts and is greater than the substitution effect.
In a call options contract, the
A) seller has the obligation to deliver the instrument at a specified time. B) buyer has the obligation to receive the instrument at a specified time. C) seller may choose whether or not to deliver the instrument at a specified time. D) buyer will choose to exercise his option only if the value of the underlying security falls.