Which of the following comparisons is true regarding price elasticity of demand?
A. The demand for monthly car payments is less elastic than the demand for a monthly gym membership because the car payments require a greater share of the consumer's income.
B. The demand for gasoline a year after a price change is less elastic than the demand for gasoline a week after a price change because consumers have had time to adjust.
C. The demand for water is less elastic than the demand for diamonds because water is a necessity but diamonds are a luxury.
D. The demand for cough syrup is less elastic than the demand for insulin because there are no close substitutes for insulin.
Answer: C
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_____________: Transactions of comparable properties may have taken place yesterday, last month, or even several years ago.
Fill in the blank(s) with the appropriate word(s).
Economic resources are also called:
A. free gifts of nature. B. consumption goods. C. units of money capital. D. factors of production.
The payment of interest not only on the original deposit, but on all previously accumulated interest is called::
A. compound interest. B. conflict of interest. C. simple interest. D. the nominal interest rate.
For a firm to be able to engage in price discrimination, it must
A. produce more than one product. B. have customers of different levels of wealth and age. C. face a downward sloping demand curve. D. have economies of scale.