Suppose that the quantity of chain saws sold increased from 200 to 400 when the price fell from $225 to $175 . Over this price range, the absolute value of the price elasticity of demand for chain saws is
a. 0.25.
b. 0.375.
c. 1.0.
d. 2.67.
e. 4.0.
D
You might also like to view...
Why would a chain store sell some items, such as soda pop, below cost?
A) They are not interested always in maximizing profit. B) They feel people need soda pop more than the other items in the store. C) Pricing some items "below cost" might be an efficient strategy to maximize the store's total profit. D) Because most firms can only enjoy profits by consistently selling all their items below cost.
Caroline earns more than John. Under a new tax system, some of the taxes paid by Caroline would go to John. A libertarian would
a. support the system because an extra dollar earned by Caroline would be worth less to her than an extra dollar given to John. b. oppose the system if it redistributed income in the presence of equal opportunity. c. oppose the system because an extra dollar earned by Caroline would be worth more to her than an extra dollar given to John. d. support the system if it maximized the well-being of the poorest member of society.
When taxes decrease, consumption
a. decreases as shown by a movement to the left along a given aggregate-demand curve. b. decreases as shown by a shift of the aggregate demand curve to the left. c. increases as shown by a movement to the right along a given aggregate-demand curve. d. increases as shown by a shift of the aggregate demand curve to the right.
Expansion of factories, investment in new computers and/or equipment are processes of capital formation.
Answer the following statement true (T) or false (F)