The Long-Run Price Elasticity of Demand Is Usually Larger Than

question 184

Multiple Choice

The long-run price elasticity of demand is usually larger than the short-run price elasticity of demand because:

• A) demand curves tend to become steeper over time.
• B) economists take the absolute value of long-run price elasticities but not of short-run elasticities.
• C) people have more time to find substitute goods.
• D) incomes tend to rise over time.
• E) supply curves change over time.

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Definitions:

Closing Process

The procedure in accounting that involves the transfer of all income and expense account balances to the retained earnings to prepare the ledger for the next accounting period.

Real Accounts

Accounts that relate to assets, liabilities, and equity, which are not closed at the end of the accounting period and carry their balances into future periods.

Permanent Accounts

Accounts that carry their balances over into the next accounting period, such as assets, liabilities, and equity accounts.

End-of-period Spreadsheet

A tool used in accounting to compile all financial information before closing the books at the end of a reporting period.