The more sensitive quantity demanded is to a change in price, the
A) smaller a change in price must be to induce a certain change in quantity demanded.
B) greater the absolute price elasticity of demand.
C) smaller the absolute price elasticity of demand.
D) closer the absolute price elasticity of demand is to zero.
Answer: B
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In the long run, the expansion path is
A) horizontal. B) vertical. C) diagonal. D) Not enough information.
The price of a McDonald's dinner is $5; the price of a Burger King dinner is $5. The marginal utility you would get from the next McDonald's dinner is 15; the marginal utility you would get from the next Burger King dinner is 20. You should:
A. consume more Burger King dinners. B. consume more McDonald's dinners. C. not consume either Burger King or McDonald's dinners. D. realize you cannot make a rational decision.