Figure 5-5 -Refer to Figure 5-5.When Price Falls from $50 to $40,it

question 226

Multiple Choice

Figure 5-5

-Refer to Figure 5-5.When price falls from $50 to $40,it can be inferred that demand between those two prices is

• A)inelastic, since total revenue decreases from $8,000 to $5,000.
• B)inelastic, since total revenue increases from $5,000 to $8,000.
• C)elastic, since total revenue increases from $5,000 to $8,000.
• D)unit elastic, since total revenue increases from $5,000 to $8,000.

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Definitions:

Labor Supplied

The total hours of work that workers are willing to offer at a given wage rate.

Hourly Wage Rate

The amount of money paid for each hour of work.

Opportunity Cost

The cost of the next best alternative forgone as a result of making a decision.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods.