Which of the following statements is? true?
A. The closer the substitutes for a particular commodity and the more substitutes there? are, the more inelastic will be its price elasticity of demand.
B. The larger the share of a? person's total budget that is spent on a? commodity, the greater that? person's price elasticity of demand is for that commodity.
C. Elasticity of demand is greater in the short run than in the long run.
D. The demand for necessities is likely to be? elastic, while the demand for luxuries is likely to be inelastic.
E.
All of the above.
Answer: B. The larger the share of a? person's total budget that is spent on a? commodity, the greater that? person's price elasticity of demand is for that commodity.
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Answer the following statement(s) true (T) or false (F)
1. Each user of a common property imposes a negative externality on its other users. 2. The producer of a public good creates a positive externality, so that such goods tend to be overproduced. 3. The tragedy of the commons is a situation where too much of an input is used by individuals, collectively making each individual worse off. 4. When people have identical tastes, an increase in the demand for a common property's use will increase the social gain it creates. 5. People use a common property up to the point where the marginal cost of using it equals the social marginal benefit received from it.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
The principal innovation that increases the safety of bank deposits is
a. computerized accounting systems. b. credit cards. c. automatic teller machines. d. deposit insurance.
Which of the following jobs is least likely to be outsourced?
A. Transcription of physicians' records B. Technical assistance over the phone for your computer C. Flipping hamburgers D. Software design