Demand is more price-elastic
A. If the product is a small part of the consumer's budget.
B. In the long run.
C. If the product is a necessity.
D. If the product has very few substitutes.
Answer: B
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If Pearl is a risk averse, then
A) expected utility has nothing to do with her choices. B) she does not have diminishing marginal utility of wealth. C) she will not buy insurance. D) risk is costly to her.
The relationship between sales and revenue is
A) a direct relationship. B) independent. C) a negative relationship. D) an inverse relationship.
When the interest rate is ________, ________ investments in physical capital will earn more than the cost of borrowed funds, so planned investment spending is ________
A) high; few; high B) high; few; low C) low; few; high D) low; many; low E) high; many; high
The production possibilities curve demonstrate which of the following concepts?
A) scarcity B) choice C) trade-offs D) all of the above