Which of the following is true?
i. The easier it is to find substitutes for a good, the more price elastic the demand for the good is.
ii. The demand for a good is more price elastic the smaller the proportion of income spent on it.
iii. If demand is price elastic, lowering the price leads to a decrease in total revenue.
A) only i
B) only ii
C) only iii
D) i and ii
E) i and iii
A
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In the figure above, with the rent ceiling ________ units of housing are available, and black market rents might be as high as ________ a month
A) 3,000; $625 B) 6,000; $400 C) 3,000; $550 D) 4,000; $550 E) 4,000; $625
Because S&Ls were FSLIC insured, they
a. were less encouraged to make risky investments b. were less likely to make questionable loans c. could not venture into speculative land deals d. were less inclined to be cautious about the quality of the loans they made e. were safer than with the FDIC
If the United States imports low-cost goods produced in low-wage countries instead of producing the goods domestically,
a. the United States will incur a net loss of total jobs. b. the United States will gain, and domestic resources will be employed more productively. c. dollars that leave the United States will not return to buy goods produced by high-wage American workers. d. the availability of consumption goods in the United States will be reduced.
A business doubled the price of a product in order to increase profits. Which of the following scenarios might have occurred?
a. A sharp increase in revenues demonstrated the elasticity of the product. b. A dramatic decline in revenues demonstrated the elasticity of the product. c. A dramatic decline in revenues demonstrated the inelasticity of the product. d. A small increase in revenues demonstrated the unit elasticity of the product.