The Figure Given Below Shows the Demand Curves of Two

question 84

Multiple Choice

The figure given below shows the demand curves of two classes of buyers for tickets to a football match. Figure 10.4
D₁: Demand curve of group 1
D₂: Demand curve of group 2
MR₁: Marginal revenue of group 1
MR₂: Marginal revenue of group 2
MC: Marginal cost
-In Figure 10.4,the demand curve D₂:

• A)has a price elasticity of demand greater than 1.
• B)is relatively less price elastic than D₁.
• C)is the inverse of the demand curve D₁.
• D)has a price elasticity of demand less than 1.
• E)represents the demand of the group that is more responsive to price changes.

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Definitions:

Crowding Out

The phenomenon where increased government spending leads to a reduction in private sector investment, due to higher interest rates or the consumption of financial resources.

Aggregate Demand

The aggregate need for goods and services in an economy at a specific price level and during a certain time frame.

Constitutional Amendment

A formal change or addition proposed to a constitution, which then requires ratification to become part of the document.

Balanced Budget

A financial statement or situation where total expected revenues are equal to total planned expenditures, without any deficit or surplus.