Answered: The size of the change in the quantity…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(7)

The size of the change in the quantity demanded of a good or service due to a change in its price is measured by the elasticity of demand. When the percentage change in the quantity demanded for a good or service is less than the percentage change in price, the demand for that good or service is ________ and the measured price elasticity is ________.

Select one:

a. inelastic; less than 1

b. unitary; equal to 1

c. elastic; greater than 1

(8)

The principal goal of the aggregate demand and aggregate supply model is to explain the

Select one:

a. contractions and expansions in individual markets.

b. shifts in the price level and the real GDP.

c. two goals of economic policy which are economic growth and full employment.

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