Suppose that if poor households have a price elasticity of demand for medical care of 0.50 and rich households have a price elasticity of demand for medical care of 0.25, then a price increase of 10% would lead to the poor households reducing their quantity demanded for medical care by:
A. 2.5%.
B. 5%.
C. 25%.
D. 50%.
Answer: B
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What is consumer surplus? Why would policy makers be interested in consumer surplus?
What will be an ideal response?
Expansionary monetary policy involves an increase in the money supply and a fall in interest rates, leading to a positive expansion in income
Indicate whether the statement is true or false
In 2011, the average American earned about $48,000 while the average Nigerian earned about $1,200 . Which of the following statements is likely?
a. The average American purchases more televisions than the average Nigerian. b. The average American has better nutrition and healthcare than the average Nigerian. c. The average American has a longer life expectancy than the average Nigerian. d. All of the above are correct.
Refer to the figures. Which of the following events would most likely result in inflation?
A. A shift from D 2 to D 1 in Figure A.
B. A shift from D 2 to D 3 in Figure A.
C. A shift from D 2 to D 1 in Figure B.
D. A shift from D 2 to D 3 in Figure B.