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Zigmanuir [339]
3 years ago
8

Demand for a given good is elastic, which means that the percentage change in __________ is greater than the percentage change i

n __________.
Business
1 answer:
bezimeni [28]3 years ago
3 0

Answer: quantity demanded; price of the goods

Explanation:  

Elasticity measures how much one economic variable responds to changes in another economic variable. The price elasticity of demand measures how responsive quantity demanded is to changes in price.

The price elasticity of demand is equal to the percentage change in quantity demanded divided by the percentage change in price. If the quantity demanded changes more than proportionally when price changes, then the price elasticity of demand is greater than 1 in absolute value, and demand is elastic. If the quantity demanded changes less than proportionally when price changes, then the price elasticity of demand is less than 1 in absolute value, and demand is inelastic. If the quantity demanded changes proportionally when price changes, then the price elasticity of demand is equal to 1 in absolute value, and demand is unit elastic.

Perfectly inelastic demand curves are vertical lines, and perfectly elastic demand curves are horizontal lines. Relatively few products have perfectly elastic or perfectly inelastic demand curves.

In terms of income elasticity of demand, a value greater than one implies that the percentage change in the quantity demanded of the good is greater than the percentage change in income.

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Answer:

Consumer behavior

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3 0
3 years ago
A family wishes to accumulate 50,000 i a college education fund by the end of 20 years. If they deposit 1,000 into the fund at t
Charra [1.4K]

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Explanation:

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3 years ago
Describe what would be some examples of fixed cost and variable cost on a farm?
EleoNora [17]
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4 0
3 years ago
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If the Ricardian equivalence theorem LOADING... is not​ relevant, then an​ income-tax-rate cut A. will result in a multiple time
LenKa [72]

Answer:

The correct answer is D. will result in a multiple times higher decrease in equilibrium real GDP in the short​ run; however, a​ tax-rate reduction will increase the​ automatic-stabilizer properties of the tax​ system, so equilibrium real GDP would be less stable.

Explanation:

Ricardian Equivalence is an economic theory that suggests that when a government increases expenses financed with debt to try to stimulate demand, demand does not really undergo any change.

This is because increases in the public deficit will lead to higher taxes in the future. To keep their consumption pattern stable, taxpayers will reduce consumption and increase their savings in order to offset the cost of this future tax increase.

If taxpayers reduce their consumption and increase their savings by the same amount as the debt to be returned by the government, there is no effect on aggregate demand.

The fundamental concept of Ricardian equivalence is that it does not matter which method the government chooses to increase spending, whether by issuing public debt or through taxes (applying an expansive fiscal policy), the result will be the same and demand will remain unchanged.

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