Which has greater elasticity: a supply curve that goes through the origin with slope of 1 or a supply curve that goes through the origin with slope of 4?
A. The supply curve with slope of 4. Slope and elasticity are directly related so the higher the slope, the higher the elasticity.
B. They both have the same elasticity. Any supply curve with a positive slope has the same elasticity.
C. They both have the same elasticity. Any supply curve that goes through the origin has an elasticity of 1.
D. The supply curve with slope of 1. Slope and elasticity are inversely related so the lower the slope, the higher the elasticity.
Ans: C. They both have the same elasticity. Any supply curve that goes through the origin has an elasticity of 1.
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The indifference curve in the diagram yields Juan 100 units of utility. If Juan's money income were to increase by 20 percent, the indifference curve would:
A. shift leftward.
B. shift rightward.
C. become steeper.
D. not be affected.