If a Rise in Price Results in a Decrease in Total

question 28

Multiple Choice

If a rise in price results in a decrease in total revenue, then the price elasticity of demand is

• A)negative.
• B)zero.
• C)greater than zero but less than 1.
• D)equal to 1.
• E)greater than 1.

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Definitions:

Unemployment

The situation of being jobless and actively looking for work but unable to find a job.

Classical Macroeconomic Model

An economic theory that emphasizes the importance of classical concepts like full employment, supply and demand, and the self-regulating nature of markets.

Full Employment

A state of the labor market where virtually all individuals who are willing and able to work at prevailing wage rates are employed.

Real GDP

The measure of a country's economic output that has been adjusted for inflation, reflecting the true value of goods and services.