If a 10 percent rise in the price of bananas leads to a 20 percent reduction in the quantity of bananas demanded, then the price elasticity of demand is 2.00
a. True
b. False
A
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Under laissez-faire, output selection is determined by
A. consumer preferences. B. production costs. C. firms’ desires to make profits. D. All of the responses are correct.
A statistical technique used to isolate the individual effects of a number of factors on a single outcome is called
A) the audit method. B) regression analysis. C) statistical discrimination. D) taste-based discrimination.
Using the above figure, suppose there is a decrease in the number of suppliers. Then
A) the equilibrium price will decrease below $25 per dozen roses. B) we cannot predict what will happen to equilibrium quantity. C) the equilibrium quantity will decrease below 10 dozen roses. D) both the equilibrium price and quantity will increase.
Refer to Figure 5-8. Suppose the emissions reduction target is currently established at 8 million tons. Should society undertake to reduce an additional 1 million tons so that the total reduction is 9 million tons?
A) No, because there is a net cost represented by the area B + C. B) Yes, because toxic fumes are dangerous and must be eliminated at any cost. C) No, because the firms will pass the additional cost on to consumers. D) Yes, because the marginal benefit exceeds the marginal cost at 8 million tons.