"The slope of the demand curve gives the elasticity of demand." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. The slope gives absolute change in price divided by the absolute change in quantity demanded. Price elasticity of demand is measured using relative changes.
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Government-sponsored goods are those goods
A) that society views desirable through the political process. B) that companies give away as promotional prizes. C) that have lower than average negative externality. D) that only low-income individuals consume.
Keynes argued that
a. irrational waves of pessimism cause decreases in aggregate demand and increases in unemployment. b. irrational waves of optimism cause decreases in aggregate demand and decreases in aggregate supply. c. changes in business and consumer expectations generally stabilize the economy. d. All of the above are correct.