Answer the following statements true (T) or false (F)
1. Price elasticity of demand tends to be greater for substitute items than for complementary goods.
2. If income increases and the demand for a product increases, the product is a normal good.
3. The more substitutes for a good, the more elastic its demand tends to be.
4. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future.
5. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future.
1. TRUE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
You might also like to view...
A ________ is a plan by one firm to price a good at marginal cost forever if the other cheats on an agreement
A) pure strategy B) grim strategy C) patent D) collusion
One of the timing problems with fiscal policy is an "operational lag" that occurs between the:
A. time the need for fiscal action is recognized and the time that action is actually taken. B. beginning of a recession and the time that it is recognized that the event is occurring. C. time that fiscal action has an impact on output, employment, and the price level and the time by which it can be determined if the policy is effective. D. time that fiscal action is taken and the time that action has an impact on output, employment, and the price level.