If the Price of a Good Rises by 10% and the Quantity

question 22

Multiple Choice

If the price of a good rises by 10% and the quantity purchased falls by 5%,then demand for the good is ________ and total spending on the good will ________.

• A)elastic; increase
• B)inelastic; increase
• C)elastic; decrease
• D)me and so inelastic; decrease

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Definitions:

Diminishing Marginal Returns

A principle stating that as more of a production input is added, holding all others constant, the resulting additional output will eventually decrease.

Range

The difference between the highest and lowest values in a data set, often used to measure variability.

Average Product

The output per unit of input, typically calculated for labor or capital in the production process.

Units of Labor

Measurements that represent the amount of work or effort by labor, typically used in the context of production processes.