The price elasticity of demand is defined as
a. the absolute change in price divided by the absolute change in quantity demanded.
b. the absolute change in quantity demanded divided by the absolute change in price.
c. the percentage change in quantity demanded divided by the percentage change in price.
d. the percentage change in price divided by the percentage change in quantity demanded.
c. the percentage change in quantity demanded divided by the percentage change in price.
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Refer to Figure 13-3. Which of the points in the above graph are possible short-run equilibria but not long-run equilibria? Assume that Y1 represents potential GDP
A) A and B B) B and D C) A and C D) C and D
Regarding business conditions during the 1930s, which of the following events did not occur?
(a) The number of patents applied for declined. (b) The number of mergers between companies increased in an attempt to increase their consolidated strength. (c) Some interest rates, such as the prime rate, fell to less than 1%. (d) In the early years of the Depression, business investment spending on plants and equipment was not enough to increase or maintain the country's capital stock.
Compared to perfect competition, a monopoly will produce ________ output, and charge a ________ price
A) more; higher B) more; lower C) less; higher D) less; lower
How does a budget deficit lead to a trade deficit?
a. The trade deficit triggers higher interest rates, which increase the budget deficit. b. The budget deficit leads to higher interest rates and exchange rates, which shrink net exports. c. The trade deficit causes lower interest rates, which leads to economic recession and a budget deficit. d. The budget deficit causes lower exchange rates, which decrease net exports.