If the price elasticity of demand for tea is unit elastic, a 10 percent increase in the price of tea results in:
a. a 12 percent decrease in the quantity demanded.
b. a 12 percent increase in the quantity demanded.
c. a 10 percent decrease in the quantity demanded.
d. a 10 percent increase in the quantity demanded.
c
You might also like to view...
The return to monopsony power refers to the
a. difference between the marginal revenue product and the wage rate of the last worker hired multiplied by the number of workers employed b. fact that the marginal cost of labor for a monopsony is lower than the wage rate c. wage rate minus the marginal revenue product d. higher marginal revenue product of labor that a worker produces under monopsony e. fact that a monopsonist can choose both the wage rate and the number of workers hired simultaneously
To the extent that high incomes can be attributed to very high demand for very scarce abilities, the labor supply effects of a substantial increase in the tax rate
a. will be zero as long as the labor supply curve is vertical. b. will be significant because the demand curve is fixed. c. cannot be predicted because the substitution and income effects offset each other. d. will be zero as long as there is no economic rent in the income.
Over the last 5 years the amount of country A's currency it took to buy a unit of country B's currency more than doubled. A. Did country A's currency depreciate or appreciate? B. According to purchasing-power parity, what explains the change in the value of country B's currency?
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B