​Figure 53

question 57

Multiple Choice

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-If a 10 percent increase in the price of gasoline results in a 2 percent decrease in the quantity demanded of gasoline, then the elasticity of demand for gasoline is:

• A)equal to 0.2 and demand is inelastic.
• B)equal to 0.2 and demand is elastic.
• C)equal to 0.02 and demand is elastic.
• D)equal to 0.5 and demand is inelastic.
• E)equal to 0.5 and the demand is elastic.

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Definitions:

Demand Curve

An illustrated chart that displays the connection between a product's price and the amount consumers are willing to buy at those price levels.

Individual Demand

The amount of a product or service that a single consumer is willing and able to purchase at various prices, holding all else constant.

Society Demand

This refers to the total demand for various goods and services by all members of a society or community, often influenced by factors like price, income levels, and societal norms.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be consumed by one individual without reducing availability to others and without a direct cost.