When the demand for a good is inelastic, that good is likely to have:
A. many close complements.
B. few close substitutes.
C. many close substitutes.
D. few close complements.
Answer: B
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Refer to Figure 15-4. What is likely to happen to this monopoly in the long run?
A) It will be regulated by the government because of its excess profits. B) New firms will enter the market to eliminate its profits. C) It will expand its output to take advantage of economies of scale so as to further increase its profit. D) As long as there are entry barriers, this firm will continue to enjoy economic profits.
Which of the following statements regarding poverty in the United States is correct?
a. There are as many poor African Americans as there are poor whites. b. The incidence of poverty is lower among females than among males. c. The incidence of poverty is higher among African Americans than among whites. d. Most of the poor people in the United States are elderly (over age 65).
While the production possibilities frontier is a useful model, it cannot be used to illustrate economic growth
a. True b. False Indicate whether the statement is true or false
Dave consumes two normal goods, X and Y, and is currently at an optimum. If the price of good X falls, we can predict with certainty that
a. Dave will consume more of both goods because his real income has risen. b. the substitution effect will be positive for good X and negative for good Y. c. Dave may consume more or less of good X, but he will consume less of good Y. d. the substitution effect will offset the income effect for good X.