Price elasticity of demand is the:
A. change in the quantity demanded of a good divided by the change in the price of that good.
B. percentage change in price of that good divided by the percentage change in the quantity demanded of that good.
C. change in the price of a good divided by the change in the quantity demanded of that good.
D. percentage change in quantity demanded of a good divided by the percentage change in the price of that good.
Answer: D
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A) aggregate demand (AD); AD B) short-run aggregate supply (SRAS); AD C) short-run aggregate supply (SRAS); SRAS D) employment; AD E) none of the above
Comparing GDP across countries is unrealistic unless we make adjustment in exchange rates to take into account differences in the cost of living via
A. real GDP. B. price index. C. international GDP. D. purchasing power parity.
In the above figure, the firm is breaking even at points
A) a and c. B) b and d. C) c and d. D) a and d.
When barriers to entry are high, a monopolist (or cartel) will often be able to increase their profits by
a. expanding their output so they can increase their price. b. reducing their output so they can raise their price. c. expanding their output so they can lower their price. d. reducing their output so they can lower their price.