The term “unit elasticity” is used to describe a situation in which a rise in price is accompanied by
A. a fall in total expenditure.
B. a rise in total expenditure.
C. constant total expenditure.
D. a unit decrease in total expenditure.
Answer: C
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Assume that a firm's marginal revenue curve intersects the rising portion of the marginal cost curve at 100 units of output. At this output level, a profit-maximizing firm's total cost is $1,000 . If the price of the product is $3 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to:
a. -$1,000. b. -$700. c. -$400. d. -$600. e. $200.
If workers and firms forecast inflation accurately,
a. the aggregate supply curve will be vertical. b. the real wage will not decline as the price level rises. c. workers will not lose from inflation, and firms will not gain. d. All of the above are correct.
An announcement that smoking will harm your ability to think clearly will most likely result in:
A) an increase in the quantity of cigarettes demanded. B) a decrease in the demand for cigarettes. C) no change in smoking habits. D) an increase in the equilibrium price of cigarettes.
Taylor has the following assets and liabilities: Two cars$15,000House$400,000Mortgage$300,000Cash$1,000Car loans$5,000Checking account balance$3,000Credit card balance$3,000 What is Taylor's wealth?
A. $105,000 B. $107,000 C. $419,000 D. $111,000