At Point C the price elasticity of demand is -1. Along line segment AB of the demand curve, the demand is
a. elastic.
b. unit elastic.
c. inelastic.
d. either elastic or inelastic, depending on whether price increases or decreases.
Answer: a. elastic.
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Independent, non-monopoly firms have an incentive advantage over monopolies in new-product innovation
Indicate whether the statement is true or false
The export supply curve shows a country's:
a. domestic surplus at various prices below the "no-trade" equilibrium price. b. domestic shortage at various prices below the "no-trade" equilibrium price. c. domestic supply at the "no-trade" equilibrium price. d. domestic surplus at various prices above the "no-trade" equilibrium price. e. domestic shortage at various prices above the "no-trade" equilibrium price.
The proponents of rational expectations believe that
a. there will be a substantial time lag before people anticipate the eventual effects of a shift to a more expansionary macro-policy. b. macro-policies that stimulate demand and place upward pressure on the general level of prices will temporarily increase output and employment. c. the inflationary side effects of expansionary policies will be anticipated quickly, and therefore, even their short-run effects on real output and employment will be minimal. d. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy.
For the most part, fiscal policy affects the economy in the short run while monetary policy primarily matters in the long run
a. True b. False Indicate whether the statement is true or false