Price Elasticity of Demand Measures

question 37

Multiple Choice

Price elasticity of demand measures:

• A)the responsiveness of the quantity demanded of a good to a change in income.
• B)the responsiveness of the quantity demanded of a good to a change in consumers' preferences.
• C)the responsiveness of the quantity demanded of a good to a change in the price of that good.
• D)the reduction in the quantity demanded of a good when the price of that good is reduced.

---

Definitions:

Public Sector Failure

A situation where government interventions in the economy fail to allocate resources efficiently, leading to a loss of economic welfare.

Economically Inefficient Outcomes

Situations where resources are not allocated optimally, leading to a decrease in overall welfare or a misallocation of resources that could result in lost benefits for society.

Public Choice Theory

A branch of economics that studies how economic theories and methodologies can be applied to political science, focusing on the behavior of voters, politicians, and government officials.

Government Decision Making

The process by which government bodies decide on policies, laws, and budget allocations among other official actions.