-Refer to Table 3-5

question 144

Multiple Choice

-Refer to Table 3-5. What is the opportunity cost of one airplane for Japan?

• A) 1/4 car
• B) 1/3 car
• C) 3 cars
• D) 4 cars

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Definitions:

Inelastic

Characterizing a situation where a change in price leads to a relatively small change in the quantity demanded or supplied.

Share of Income

The portion of total income (either personal or national) that is received by an individual, household, or socioeconomic group.

Elastic

A demand curve on which percentage quantity changes more than percentage price is said to be elastic, or sensitive to price. If |e| > 1, demand is elastic, where e is the price elasticity of demand. If |e| = 0, demand is perfectly inelastic while if |e| is infinite, demand is perfectly elastic. If |e| 5 1, demand is unit elastic.

Normal Good

A good for which demand increases when consumer income rises, and falls when consumer income decreases, all else being equal.