Unit Elastic Demand Means That the

question 208

Multiple Choice

Unit elastic demand means that the

• A) ratio of a change in the quantity demanded to a change in the price equals 1.
• B) ratio of a percentage change in the quantity demanded to a percentage change in the price equals 1.
• C) demand curve is vertical.
• D) demand curve is horizontal.

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Definitions:

Indifference Map

A graph representing a set of indifference curves to illustrate consumer preferences for different combinations of goods, assuming equal satisfaction.

Total Utility

The total satisfaction received from consuming a particular quantity of goods or services.

Money Income

The complete sum of money earned by an individual or a household that includes earnings from work, salaries, and additional income sources.

Budget Line

A graphical depiction of all possible combinations of two goods that can be purchased with a given budget and prices.