If Demand Is Inelastic

question 7

Multiple Choice

If demand is inelastic,

• A)then it changes very little in response to a price change.
• B)then it changes significantly in response to a price change.
• C)then demand is zero.
• D)then demand is infinite.

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Definitions:

Transfer Payments

Payments made by the government to individuals without any services or goods being received in return, such as welfare payments or social security benefits.

GDP

Gross Domestic Product entails the comprehensive valuation of every good and service produced in a country over a particular period, serving as a gauge for economic performance.

Unemployment Compensation

Financial payments given to individuals who have lost their jobs without their own fault, provided by the government or other authorized bodies.

Transfer Payment

A payment made by the government to individuals, without any goods or services being received in return. This includes welfare payments, social security, and subsidies.