A straight line demand curve has a different elasticity of demand at different points along the curve
a. True
b. False
Indicate whether the statement is true or false
True
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Answer the next question based on the following data. All figures are in billions of dollars.Government purchases$15Consumption90Gross investment20Consumption of fixed capital5Exports8Imports12This nation's GDP is ________.
A. $116 B. $125 C. $150 D. $121
Suppose you have purchased a non-refundable plane ticket and, at the last moment, you cannot take the trip. You can, however, sell the ticket. If you paid $700 for the ticket, the cost of sending the ticket to someone through overnight mail is $20, and you spend $10 on a courier to get the ticket to the post office for overnight delivery, what is the minimum you should accept for the ticket?
a. $700 because that is what the ticket cost. b. $720 because that is the cost of the ticket and of getting it to the buyer. c. $730 because that is the total cost of the ticket and getting it to the buyer. d. More than $730, so that you can make a profit. e. $30 because the $700 is a sunk cost.
Because of easy entry, monopolistically competitive firms will
a. produce at the lowest average total cost b. charge a price equal to marginal cost c. earn no economic profit in the long run d. take advantage of all economies of scale e. earn no economic profit in the short run
The income elasticity of demand for education is 3.5. Thus, a 4% increase in income will
A. decrease the quantity of education demanded by 3.5%. B. decrease the quantity of education demanded by 14%. C. increase the quantity of education demanded by 14%. D. increase the quantity of education demanded by 4%.