The price of one bedroom apartments in Cheyenne increased from $55,000 to $65,000 and the quantity of apartment for sale increased from 25 to 30. Using the midpoint method, the price elasticity of supply for apartments in Cheyenne is equal to
A) 0.916.
B) 0.75.
C) 1.09.
D) 2.18.
E) 0.08.
A
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Higher nominal interest rates ________ the amount of money demanded and higher real income ________ the amount of money demanded.
A. increase; increases B. increase; decreases C. decrease; decreases D. decrease; increases
People consistently consider sunk costs when weighing the trade-offs involved in a decision because:
A. they are rational. B. they are utility-maximizers. C. they think at the margin. D. they find it hard to accept their losses.
Other things constant, if the Fed decreased the discount rate,
a. the earnings of the Fed would increase. b. the incentive of commercial banks to borrow from the Fed would be reduced. c. the prime interest rate would automatically decline. d. commercial banks probably would reduce their excess reserves and be more willing to extend additional loans.
Consider a labor market in equilibrium. If the demand curve shifts to the right while the supply curve shifts to the left, then the wage rate in the market will:
A. increase. B. decrease. C. remain unchanged. D. either increase or decrease or remain unchanged.