If a Good Has Many Close Substitutes, It Is Likely

question 20

Multiple Choice

If a good has many close substitutes, it is likely that the _____.

• A) price elasticity of the good is highly inelastic
• B) demand curve for the good is upward sloping
• C) quantity demanded of the good is very sensitive to changes in price
• D) demand for the good will increase in proportion to an increase in income

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Definitions:

Public Transportation

Systems of transport available to the public, including buses, trains, and subways, for traveling within and between areas.

Tax-Deferred Retirement Plan

A savings plan that allows individuals to invest money for retirement while deferring taxes on the earnings until withdrawal.

Annual Return

The percentage change in an investment's value over a year, accounting for dividends, interest, and capital gains.

Compounded Monthly

A financial term referring to the process of calculating interest on both the initial principal and the accumulated interest from previous periods on a monthly basis.