When a good has a unitary price elasticity, consumer expenditures for the good
A) change in the same direction as a price change.
B) change in the opposite direction to a price change, but not necessarily by the same percentage as the price change.
C) do not change when the price of the good decreases.
D) change in the opposite direction and by the same percentage as any price change.
C
You might also like to view...
The price-specie-flow mechanism
A) is an automatic mechanism for assuring external balance under floating exchange rates. B) is an automatic mechanism for assuring external balance under the gold standard. C) is an automatic mechanism for assuring internal balance under floating exchange rates. D) is an automatic mechanism for assuring internal balance under the gold standard. E) is an automatic mechanism for assuring internal balance under mercantilism.
The above figure shows the market for apples. If apple farmers convince the government to set a minimum price of $4 per pound, then
A) 100 pounds of apples will be sold at $4. B) no apples will be supplied. C) no apples will be demanded. D) None of the above.