If consumers spend more money on coffee than on sugar, then the demand for a pound of coffee is probably ________ than is the demand for a pound sugar of because ________.
A. more price elastic; people will take a longer time to adjust to the change in its price
B. more price elastic; coffee requires a larger portion of consumers' incomes.
C. less price elastic; people will take a longer time to adjust to the change in its price.
D. less price elastic; coffee requires a larger portion of consumers' incomes.
Answer: B
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Diminishing marginal utility suggests that
a. more is always preferred to less. b. the well-being of society is maximized when the distribution of income is equal. c. the poor are less efficient at spending money than the rich. d. the poor receive more satisfaction from the last dollar spent than the rich.
A simple Keynesian model is representative of a closed economy, with no foreign sector
Indicate whether the statement is true or false