The percentage change in quantity demanded divided by the percentage change in income is referred to as the
a. price elasticity of demand
b. income elasticity of demand
c. cross-price elasticity of demand
d. slope of the demand curve
e. demand curve
B
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Is the minimum wage an example of a price floor or a price ceiling? Why?
What will be an ideal response?
Which of the following is an advantage of earmarked taxes?
a. They are flexible. b. They never lead to overproduction. c. They make it more difficult for politicians to alter the expenditure mix away from their preferences. d. They make it easier for politicians to alter the expenditure mix to achieve economic efficiency.
The term "other things equal" means that:
A. the associated statement is normative. B. many variables affect the variable under consideration. C. a number of relevant variables are assumed to be constant. D. when variable X increases so does related variable Y.
Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs. After all economic adjustments have been completed, product price will be:
A. lower, but total output will be larger than originally. B. higher and total output will be larger than originally. C. lower and total output will be smaller than originally. D. higher, but total output will be smaller than originally.