If the price of Coca-Cola increases from 40 cents to 50 cents per can and the quantity demanded decreases from 100 cans to 50 cans, then the value of the price elasticity of demand for Coca-Cola is:
A. unit elastic.
B. elastic.
C. inelastic.
D. perfectly inelastic.
E. perfectly elastic.
Answer: B. elastic.
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Because of the significant snow fall in the plains this year, the supply of fertilizer to Washington State's apple farmers substantially decreased. As a result, the price of fertilizer has increased in Washington State. This statement indicates the
A. amount of apples that will be available at various prices will decline. B. price of apples will decrease. C. demand for apples will necessarily decrease. D. supply for apples will necessarily increase.
Although the McNary-Haugen bill never became law, it was widely discussed during the 1920s. Which of the following was NOT a provision of the bill?
a. government purchase of crops in order to raise agricultural prices b. government sale of excess crops on the world market c. payment for the program through capital gains taxes on business d. high tariffs on agricultural imports e. All of the above were provisions of the McNary-Haugen Bill.
Most economists consider a theory a good one if it predicts well
a. True b. False
"Output fell 2 percent last quarter" is an example of a positive economic statement
a. True b. False