The Demand for Computer Chips Is a Downward Sloping Straight

question 268

Multiple Choice

The demand for computer chips is a downward sloping straight line. If there is an increase in the supply of computer chips, this change will

• A) increase the price elasticity of demand for computer chips.
• B) decrease the price elasticity of demand for computer chips.
• C) have no effect on the price elasticity of demand for computer chips.
• D) have an unpredictable effect on the price elasticity of demand for computer chips.

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Definitions:

Wealth

The total value of all financial and material possessions owned by an individual, entity, or country.

Probability

A measure of the likelihood that a specific event will occur, often expressed as a number between 0 and 1, where 1 represents certainty.

Von Neumann-Morgenstern Utility Function

A mathematical model that represents an individual's preference structure in a way that allows for measurable utility and decision-making under uncertainty.

Expected Utility Maximizer

An economic agent who makes choices under uncertainty to maximize their expected satisfaction or utility.