When the absolute price elasticity of demand is less than 1, demand is
A) elastic.
B) unit-elastic.
C) inelastic.
D) undetermined without more information.
C
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Suppose real GDP is $13 trillion and potential real GDP is $13.5 trillion. If Congress and the president increase government purchases by $500 billion, then the economy will be brought to equilibrium at potential real GDP
Indicate whether the statement is true or false
What is the term used for the process by which an entrepreneur creates or recognizes a new and better product, acquires it, and brings it to market, making older substitutes obsolete?
A. Creative destruction B. Innovation C. The substitution effect D. Backward-bending innovation
Inflation caused by a rise in per unit production costs is referred to as:
a. Unanticipated inflation b. Demand-pull inflation c. Hyperinflation d. Cost-push inflation
Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources. Which scenario best sets the stage for economic growth?
A) The unemployment rate in Indiana rises from 5% to 6%. B) The Midwest has a devastating drought. C) The percentage of Indiana residents with a college degree rises from 25% to 30%. D) The United States imports more and more low-cost steel from Asian countries.