In Which of the Cases Given Below Will the Elasticity

question 300

Multiple Choice

In which of the cases given below will the elasticity of demand for workers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is

• A)5, and labor's share of total costs is 20 percent.
• B)5, and labor's share of total costs is 75 percent.
• C)0.1, and labor's share of total costs is 20 percent.
• D)0.1, and labor's share of total costs is 75 percent.

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Definitions:

Medium Of Exchange

An intermediary instrument, such as money, used to facilitate buying and selling goods and services.

Money

A medium of exchange that facilitates trade, serves as a unit of account, a store of value, and sometimes, a standard of deferred payment.

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type.

Legal Tender

U.S. currency that constitutes a valid and legal offer of payment of debt.