Which of the Following Is True

question 121

Multiple Choice

Which of the following is true?
I.The demand for a good is elastic if when its price changes,the percentage change in the quantity demanded exceeds the percentage change in price.
II.Price elasticity of demand equals the percentage change in price divided by the percentage change in the quantity demanded.
III.If demand is price inelastic,a rise in price leads to a decrease in total revenue.

• A) Only I
• B) Only II
• C) Only III
• D) I and II
• E) II and III

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Definitions:

Efficiency

The extent to which resources are used in the most productive way possible to achieve maximum output or outcomes.

Opportunity Costs

The cost of an alternative that must be forgone in order to pursue a certain action or the benefits you miss out on when choosing one alternative over another.

Economic Welfare

The overall health and well-being of an economy, often measured by standards of living, availability of goods and services, and income distribution.

Economic Efficiency

A state in which resources are ideally distributed to best meet the needs of every person or entity, reducing waste and inefficiency to a minimum.