Technically the elasticity number is negative because
A. When price falls quantity demanded will rise, but for simplicity economists take the absolute value of the elasticity number.
B. When price rises quantity demanded will rise, but for simplicity economists take the absolute value of the elasticity number.
C. The demand curve is upward-sloping.
D. When price falls quantity demanded will fall, but for simplicity economists take the absolute value of the elasticity number.
Answer: A
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A few years ago, the city of Seattle, Washington, considered imposing a specific tax on all espresso-based coffee drinks sold in the city. The extra tax revenue generated would have been used to fund after-school programs for low-income children
The coffee-house owners (firms) agreed that this would be a good program to fund, but they argued that the tax would sharply reduce their sales volume and they would pay most of the tax burden. This claim is true if: A) the demand for espresso-based coffee is more inelastic than supply. B) the demand for espresso-based coffee is more elastic than supply. C) there are no close substitutes for espresso-based coffee drinks. D) espresso-based coffee drinks can be produced at constant marginal cost.
Public choice analysis suggests that the primary motivating factor for politicians will be finding the policies that are most likely to
a. get them reelected. b. improve economic efficiency. c. improve the welfare of society as a whole. d. anger the interest groups that provide substantial contributions to their campaigns.
From 1980 to 1987, U.S. net capital outflows decreased. According to the open-economy macroeconomic model, which of the following could have caused this?
a. an increase in the demand for U.S. currency in the market for foreign-currency exchange b. a decrease in the demand for U.S. currency in the market for foreign-currency exchange c. an increase in the supply of loanable funds d. a decrease in the supply of loanable funds
Marginal utility is the:
A) sensitivity of consumer purchases of a good to changes in the price of that good. B) change in total utility obtained by consuming one more unit of a good. C) change in total utility obtained by consuming another unit of a good divided by the change in the price of that good. D) total utility associated with the consumption of a certain number of units of a good divided by the number of units consumed.