The response of quantity demanded to price changes is shown by:
A. Price elasticity of demand.
B. The determinants of demand.
C. Opportunity cost.
D. Income elasticity of demand.
Answer: A. Price elasticity of demand.
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The key feature of an oligopoly is that there
A) are many buyers and sellers. B) is one seller. C) exists product differentiation. D) are only a few sellers.
From the data in the above table, when the economy is in short-run equilibrium, if aggregate demand does not change, then as time passes the
A) short-run aggregate supply curve shifts rightward. B) short-run aggregate supply curve shifts leftward. C) long-run aggregate supply curve shifts rightward. D) long-run aggregate supply curve shifts leftward.
Higher education is a normal good. If its price falls,
a. the quantity demanded of higher education will fall. b. the substitution and income effects work in opposite directions. c. the income effect is positive. d. higher education will be a Giffen good.
Refer to the accompanying figure. When P = 4, the price elasticity of demand for the demand curve D1 is ________ and D2 is ________.
A. 1/3; 3 B. 3; 3 C. 1/3; 2/3 D. 2/3; 1/3