Demand for a good is inelastic if:
A. total revenue decreases when price decreases.
B. the quantity effect outweighs the price effect of a price increase.
C. the absolute value of price elasticity is greater than 1.
D. None of these is true.
A. total revenue decreases when price decreases.
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Assume that the full-employment level of output is $1,000 and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $1,100 and at the price level of 100 current aggregate demand is $1,200. If the government moves the economy back to the full-employment level of output by increasing taxes by $50, then the expenditures multiplier equals
A. 2. B. 10. C. 5. D. 4.
At the current level of output, the marginal social cost of sandwiches exceeds the marginal social benefit of sandwiches. Compared to the allocatively efficient quantity we are producing too ________ sandwiches and too ________ of other goods
A) many; little B) many; much C) few; little D) few; much
In the above figure, when the economy is in a long-run equilibrium, the price level will be
A) 90. B) 100. C) 110. D) 120.
A lower interest rate ________ Ap and thus causes ________ the IS curve
A) raises, movement downward along B) lowers, movement upward along C) raises, a parallel rightward shift of D) lowers, a parallel leftward shift of