During World War II, the price of rubber went up considerably. The rise in price stimulated research for alternatives. Today's automobile tires are made almost entirely from synthetic materials. As a result, the increase in the price of rubber eventually led to a very large drop in quantity demanded. This is an example of how the price elasticity of demand:
A. rises the less specifically the good is defined.
B. rises the greater the time frame considered.
C. falls the greater the time frame considered.
D. falls the less specifically the good is defined.
Answer: B
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What will be an ideal response?
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A) discriminate against middle aged tenants. B) discriminate against students. C) discriminate against wealthy tenants. D) experience high vacancy rates. E) maintain apartments in better condition.
Which factors will cause the consumption function to shift? Which factors do not cause the function to shift?
What will be an ideal response?
If income elasticity for a good or service is _______, then we can say that the good or service is ______.
A. negative; inferior B. negative; normal C. positive; inferior D. zero; normal