Suppose the price elasticity of demand for methamphetamine is -0.35
If decriminalization caused the price of methamphetamine to fall by 75 percent, what will be the percentage increase in the quantity of methamphetamine demanded? If the price elasticity is -3.5, what will be the percentage increase in quantity demanded?
If price elasticity of demand is -0.35, a 75 percent drop in price would increase the quantity demanded by 26.25 percent.
If price elasticity of demand is -3.5, a 75 percent drop in price would increase the quantity demanded by 262.5 percent.
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An economy's ________ will fall if its real interest rate rises
A) labor supply B) real wage rate C) supply of credit D) real output
The aggregate demand curve is downward sloping because a higher inflation rate leads the central bank to raise ________ interest rates, thereby ________ the level of equilibrium aggregate output., everything else held constant
A) real; lowering B) real; raising C) nominal; lowering D) nominal; raising
Suppose that three oligopolistic firms are currently charging $12 for their product. The three firms are about the same size
Firm A decides to raise its price to $18, and announces to the press that it is doing so because higher prices are needed to restore economic vitality to the industry. Firms B and C go along with Firm A and raise their prices as well. This is an example of A) price leadership. B) collusion. C) the dominant firm model. D) the Stackelberg model. E) none of the above
Explain why the scarcity of resources causes people and nations to consider opportunity costs and trade-offs among choices. Give a personal example of an opportunity cost that you have faced and the impact of the decision you made.