Good A has many close substitutes, while good B has no close substitutes. Which of the following is true?
a. the demand for both goods is likely to be inelastic.
b. the demand for both goods is likely to be elastic.
c. the demand for good A is likely to be elastic, the demand for good B inelastic.
d. the demand for good B is likely to be elastic, the demand for good A inelastic.
e. both goods will have elasticity of 1.
c. the demand for good A is likely to be elastic, the demand for good B inelastic
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The three largest firms in an industry have market shares of 40 percent, 30 percent, and 2 percent. The remaining 47 firms in the industry each have a market share of 1 percent. The Herfindahl-Hirschman Index (HHI) for this industry is
A) 2,551. B) 5,184. C) 24,061. D) 10,000. E) 3,013.
At the end of an expansion, wages of workers are usually rising faster than prices
Indicate whether the statement is true or false
If the federal government tries to make fiscal policy sustainable by decreasing expenditure on transfer programs such as Social Security, Medicare, and Medicaid, ________ will bear the burden of adjusting fiscal policy, and this will result in a
lower standard of living for those who bear the burden. A) high-income households B) individuals in the labor force C) middle class taxpayers D) the elderly and poor
This table shows the demand and supply schedule of a good.
According to the table shown, at a price of $2.00 quantity demanded:
A. exceeds quantity supplied and a shortage exists.
B. is less than quantity supplied and a shortage exists.
C. exceeds quantity supplied and a surplus exists.
D. is less than quantity supplied and a surplus exists.