If a Good Has an Absolute Price Elasticity of 1

question 177

Multiple Choice

If a good has an absolute price elasticity of 1, the demand for the good is

• A) unit elastic.
• B) inelastic.
• C) perfectly elastic.
• D) elastic.

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Definitions:

Exchange Theory

A social psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties.

Rational Choice Theory

A theory in economics and sociology that suggests individuals always make prudent and logical decisions that provide them with the highest amount of personal utility.

Psychological Principles

Psychological principles refer to fundamental theories and established facts derived from psychology that explain and predict behaviors and mental processes.

Social Behaviors

Actions and reactions of individuals or groups in response to external or internal stimuli, influenced by cultural, social, and psychological factors.