Which of the Following Is True of a Good That

question 162

Multiple Choice

Which of the following is true of a good that has a price elasticity of demand of −3?

• A) If the income of a consumer increases by 3 percent, the quantity demanded of the good will increase by 1 percent.
• B) If the income of a consumer increases by 1 percent, the quantity demanded of the good will increase by 3 percent.
• C) If the price of the good increases by 1 percent, the quantity demanded of the good will decrease by 3 percent.
• D) If the price of the good increases by 3 percent, the quantity demanded of the good will increase by 1 percent.

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Definitions:

Productive

Refers to the efficiency and capability of producing goods and services, often measured by output per unit of input.

MRP Schedule

Refers to the schedule showing the relationship between the marginal revenue product (MRP) of labor or another input and the amount of the input employed, underpinning decisions in factor markets.

Derived Demand

The demand for a factor of production or intermediate good that occurs as a result of the demand for another good or service.

Derived Demand

Demand for a factor of production or intermediate good that occurs as a result of the demand for another good or service.