If the demand for a product is elastic, then a rise in price will
a. cause total spending on the good to increase.
b. cause total spending on the good to decrease.
c. keep total spending the same, but reduce the quantity demanded.
d. keep total spending the same, but increase the quantity demanded.
QUESTION 2Vertical relationships can increase profits through
a. preventing firms from evading regulation
b. creating a double-markup problem
c. better aligning the incentives of manufacturers and retailers
d. preventing price discrimination
QUESTION 3U.S. medical care spending is
a. higher as measured by overall spending.
b. Higher as measured by per capita spending.
c. Higher as measured by a percentage of GDP.
d. All of the above.
QUESTION 4An increase in the price of good X will be accompanied by
a. a shift in the market demand curve for good X.
b. a shift in the market demand curve for good Y (a substitute for good X).
c. a movement along the market demand curve for good X.
d. Both b and c.
QUESTION 5Vertical relationships can increase profits through
a. preventing firms from evading regulation
b. eliminating a double-markup problem
c. making the incentives of manufacturers and retailers unaligned
d. preventing price discrimination
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