When is demand perfectly elastic? When is demand perfectly inelastic? What are the values of the price elasticity of demand when demand is perfectly elastic or perfectly inelastic? What do perfectly elastic and perfectly inelastic demand curves look like?
What will be an ideal response?
Demand is perfectly elastic when quantity demanded is infinitely responsive to price. If demand is perfectly elastic, price elasticity of demand equals infinity, and the demand curve is a horizontal line. Demand is perfectly inelastic when quantity demanded is completely unresponsive to price. If demand is perfectly inelastic, price elasticity of demand equals zero, and the demand curve is a vertical line.
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If the opportunity costs of production for two goods is different between two countries, then
A) only one country can be made better off by trade. B) trade will only benefit both countries if one can lower its opportunity costs. C) trade cannot benefit either country. D) mutually beneficial trade is possible.
What is the present value of $104.25 that you could receive one year from now, given that the rate of interest is 4.25 percent?
A) $108.50 B) $0.00 C) $4.25 D) $100.00