The figure illustrates Elijah's preferences. He is currently at point A. The price of pizza decreases. The move from point A to point ________ is the substitution effect and the move from point ________ to point ________ is the income effect
A) B; B; C
B) E; E; C
C) D; D; B
D) C; C; B
B
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If a good has a price elasticity of demand equal to 0, ________
A) the percentage change in quantity demanded for the good will be greater than the percentage change in its price B) the demand curve of the good is upward sloping C) the smallest increase in its price causes consumers to stop consuming it completely D) the quantity demanded is completely unaffected by a change in its price
The closer monopolistic competition gets to perfect competition
a. the more vertical the AR curve. b. the more horizontal the AR curve. c. the greater the difference between AR and MR. d. the greater the profit.
The process by which new products and technologies drive out existing products and techniques is known as:
A. Consumer sovereignty. B. Creative destruction. C. Capital accumulation. D. Destructive creation.
Refer to the graph below. If the output level is Q1, then there are efficiency losses indicated by the area:
A. 0abe
B. bce
C. 0eQ1
D. ecf