For Demand to Be Elastic

question 20

Multiple Choice

For demand to be elastic,

• A)the percentage change in quantity demanded must be greater than the associated percentage change in price.
• B)demand must change with a change in price.
• C)the percentage change in quantity demanded must be less than the associated percentage change in price.
• D)the percentage change in quantity demanded must be equal to the associated percentage change in price.
• E)quantity demanded must change with a change in price.

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Definitions:

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors, enabling beneficial trade.

Absolute Advantage

The capacity of a nation, individual, organization, or area to generate a product or offer a service at a cost per unit that is less than what any other party can produce that same good or service for.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits an individual, investor, or business misses out on when choosing one option over another.

Bushel

A measure of volume that is used primarily in agriculture, equal to about 35.24 liters in the USA.