For Any Horizontal Demand Curve, the Price Elasticity of Demand

question 39

Multiple Choice

For any horizontal demand curve, the price elasticity of demand is:

• A)0.
• B)1.
• C)infinite.
• D)equal to the price of the good.

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Definitions:

John Maynard Keynes

A British economist whose ideas fundamentally changed the theory and practice of macroeconomics and economic policies of governments.

Classical Economists

Early economists, such as Adam Smith and David Ricardo, who focused on the role of free markets in promoting economic growth and efficiency.

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A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in successive quarters.

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The cost of borrowing money expressed as a percentage of the principal, or the rate earned by savings and investments.