Which of the following causes a good to be more elastic?
a. Fewer suppliers of the good.
b. Fewer substitutes.
c. Greater necessity.
d. Greater percentage of income
Answer: d. Greater percentage of income
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The substitution effect of a decrease in the price of movie tickets results in
A) a decrease in the quantity of movie tickets demanded. B) an increase in the demand for movie tickets. C) an increase in the quantity of movie tickets demanded. D) a decrease in the demand for movie tickets.
As it relates to R&D, a firm's expected-rate-of-return-curve, r:
A. slopes downward because the firm arrays, highest to lowest, the rates of return on R&D activities. B. slopes upward because of the law of diminishing returns. C. is a horizontal line. D. depends on whether it borrows from the bank or used retained earnings in financing R&D.