"I'm telling you, instead of charging $50 each, they could give the opera tickets away for free, and I myself still wouldn't go—ever!" What can we say about this person's demand for opera tickets?
A) His price elasticity is infinite, which means his demand curve is upward sloping.
B) His price elasticity is exactly equal to 1, which means his demand curve is unit elastic.
C) His price elasticity is exactly equal to 50, which means his demand curve is very elastic.
D) He doesn't have a demand for opera tickets.
D
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If the marginal rent cost of moving from Apartment 1 to Apartment 2 is -$60, and marginal commuting cost of moving from Apartment 1 to Apartment 2 is $40:
A) moving from Apartment 1 to 2 will save the renter $60 more in rent and $40 more in commuting. B) moving from Apartment 1 to 2 will cost the renter $60 more in rent but save $40 in commuting. C) moving from Apartment 1 to 2 will cost the renter $60 more in rent and $40 more in commuting. D) moving from Apartment 1 to 2 will save the renter $60 in rent but cost $40 more in commuting. Assume that a firm wants to set up a factory. It has four different options. The rent of the factory in the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour. Factory Location Monthly Commuting Time (hours) Monthly Rent ($) Very Far 30 2,060 Far 25 2,100 Close 15 2,300 Very Close 5 2,500
Figure 2-10
Consider the production possibilities frontier for food and clothing in . A movement from point J to point K could be caused by
a.
the development of new and better technology
b.
increasing unemployment
c.
the movement of society into a recession
d.
the law of increasing opportunity costs
e.
eliminating productive inefficiency