Figure 6-5 -In Figure 6-5, If Price Falls from Point a to Point

question 36

Multiple Choice

Figure 6-5
-In Figure 6-5, if price falls from point A to point B along the unit-elastic demand curve,

• A)total expenditure remains unchanged.
• B)total expenditure increases.
• C)total expenditure decreases.
• D)total expenditure first increases and then declines.

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Definitions:

Basis

In finance, the difference between the cash price and the futures price of an asset; in accounting, the initial value of an asset for tax purposes.

Vehicles

Modes of transportation that include cars, trucks, bicycles, and any other means of transporting people or goods.

Nonrenewable Sources

Natural resources such as coal, oil, and natural gas that cannot be replenished on a human timescale.

Renewable Sources

Energy sources that are replenished naturally, such as solar, wind, and hydroelectric power.