Suppose the supply of bicycles is price elastic. This means that
A) consumers will respond significantly to an increase in the quantity of bicycles supplied.
B) suppliers will respond significantly to changes in the price of bicycles.
C) suppliers face many substitutes for bicycles.
D) suppliers will increase the quantity of bicycles supplied, but not immediately.
B
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Suppose that GDP is equal to 1000, national saving is equal to 200, the current account deficit is equal to 100, and the government budget deficit is equal to 50. Investment must equal
A) 150. B) 200. C) 250. D) 300.
Answer the following statements true (T) or false (F)
1. In terms of combined volume of exports and imports, the largest trading partner of the United States is China. 2. The combined total of exports plus imports accounted for more than 50% of U.S. GDP in 2012. 3. The U.S. has a trade deficit in goods, but a trade surplus in services. 4. When a country has a comparative advantage in some product, it has a higher domestic opportunity cost, but can charge a lower price for the product. 5. Nation A can produce either 6 units of steel or 8 units of wheat. Nation B can produce either 10 units of steel or 10 units of wheat. These data suggest that Nation A has the comparative advantage in producing wheat.