The price elasticity of demand coefficient for a good will be lower:
a. if there are few substitutes for the good.
b. if expenditure on it is a small part of one's budget.
c. both a and b are true.
d. neither a nor b are true.
c
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Which of the following would cause a decrease in aggregate demand?
A) a rise in wages B) an increase in the money supply C) a fall in investor confidence D) an increase in the price level
Which of the following is an example of a compensating wage differential?
A) Workers in a dynamite mine receive higher wages than if they worked in other jobs that require the same level of skills. B) Nurse anesthetists are paid less than anesthesiologists (who have medical degrees). C) In the market for lawyers, top graduates from the top programs earn starting salaries that are significantly higher than the starting salaries earned by lower-ranked graduates from the lower-ranked programs. D) Popular movie stars like George Clooney command much higher salaries than other talented but lesser-known actors.