Refer to Scenario 5 . Calculate the price elasticity of demand for DVD players. Is demand for players elastic, inelastic, or unitary?
What will be an ideal response?
Percentage change in quantity demanded is 1.24 . Percentage change in price is -0.67 . The price elasticity of demand for DVD players is 1.86 or relatively elastic.
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If the CPI this year is 240 and the CPI last year was 217, the inflation rate from last year to this year was
A) 1.11%. B) 9.0% C) 10.6%. D) 23%.
In the Baumol-Tobin analysis of transactions demand for money, either an increase in ________ or a decrease in ________ increases money demand
A) income; interest rate B) interest rates; brokerage fees C) brokerage fees; income D) interest rate; income
There is a flexible exchange rate system and only two countries in the world, the United States and Mexico. An increase in income growth in Mexico relative to income growth in the United States will cause the
A) dollar to appreciate. B) peso to depreciate. C) dollar to depreciate. D) a and b E) There is not enough information to answer the question.
What type of CPI bias occurs when consumers switch from buying groceries at their local supermarket to buying them at a discount warehouse like Costco?
a. new outlet b. new product c. quality d. substitution