(Last Word) Based on the concept of price elasticity of demand, which of the following cases is most likely to occur?
A. Golf courses charging higher prices for golf during the week than on weekends.
B. Movie theaters charging higher prices for senior citizens.
C. Colleges charging lower tuition for low-income students.
D. Airlines charging lower fares for business travelers.
Answer: C
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The Keynesian short-run aggregate supply curve is horizontal because
A) it represents Say's law. B) it reflects wage and price inflexibility. C) it represents the full employment level of real GDP. D) it reflects the absence of money illusion.
Country X is the largest producer and exporter of oil in the world. Which of the following is likely to happen if the world demand for oil increases?
A) Country X's labor demand curve will shift to the right. B) Asset prices in Country X will fall. C) Country X's labor supply curve will shift to the left. D) Consumption expenditure in Country X will fall.
Moral hazard occurs when one side of an economic relationship:
A. takes costly actions that the other side of the relationship cannot observe. B. takes actions that is contrary to the religious beliefs of the other side of the economic relationship. C. takes actions that the other side of the relationship enjoys doing. D. takes actions that the other side of the relationship cannot force them to do.
Assume the demand curve for skirts in Europe is P = 100 -QE (or Qe=100 - P), while the U.S. demand is P = 100 -¼QUS. (or Qus = 400 - 4P). Over the range of prices, which demand is more price elastic?
A. Demand in the United States is more elastic. B. Demand in the United States and Europe has the same elasticity for any price level. C. It depends on the price level. D. Demand in Europe is more elastic.