If the price of gasoline rises by 20 percent and consumption of gasoline falls 5 percent,
a. demand is elastic.
b. demand is unit-elastic.
c. demand is inelastic.
d. elasticity of demand cannot be calculated.
c
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The long-run Phillips curve is a vertical line because
A) there is no relationship between the natural unemployment rate and the inflation rate. B) real GDP does not depend on the unemployment rate. C) in the long run, the natural unemployment rate increases when inflation increases. D) the unemployment rate decreases when the inflation rate increases. E) the natural unemployment rate only depends on the inflation rate.
A tariff is a
A. subsidy to workers harmed by U.S. trade with foreign countries. B. limit on the quantities of a good that can be imported each year. C. tax on exports that tends to make them cheaper for foreigners to buy. D. tax on imports that raises their prices and makes them less attractive to domestic consumers.
In the financial crisis that precipitated the 2007-2009 recession, people systematically overestimated their prospects for financial gain. Which branch of economics would most likely have expected to predict this?
A. Neoclassical economics. B. Keynesian economics. C. Behavioral economics. D. Classical economics.
As new firms enter a decreasing-cost industry
A. the position of the LRAC curve doesn't change, but firms move down their LRAC curve. B. the LRAC curve shifts down. C. the LRAC curve shifts up. D. the position of the LRAC curve doesn't change, but firms move up their LRAC curve.