If a 5 percent decrease in the price of a good produces a 5 percent increase in the quantity demanded, the price elasticity of demand is:

A. perfectly elastic.
B. unitary elastic.
C. elastic.
D. inelastic.

Answer: B

Economics

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Which of the following is motivated by an efficiency concern?

A) The United Network for Organ Sharing advocates a system of rationing scarce kidneys that would favor young patients over old in an effort to wring more life out of donated organs. B) In December 2006, the Bush administration restarted a short-term housing assistance program for victims of Hurricane Katrina. C) Each year, the University of Notre Dame conducts a lottery to parcel out the 30,000 seats available to contributors, former athletes, and parents in the 80,000-seat stadium. D) The federal government's housing choice voucher program assists very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.

Economics

Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and net exports are $4 billion. Then desired investment equals

A) $2 billion. B) $4 billion. C) $6 billion. D) $8 billion.

Economics