If the price of Pepsi-Cola increases from 40 cents to 50 cents per bottle and the quantity demanded decreases from 100 bottles to 50 bottles, then according to the averaging equation, the value of price elasticity of demand for Pepsi-Cola is:
a. 0.5.
b. 0.25.
c. 1.
d. 3.
e. 2.
d
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Keynesian economists today favor a model in which the aggregate supply curve is relatively flat at low levels of real GDP and slopes downward as real GDP approaches its potential level
a. True b. False Indicate whether the statement is true or false
The major protection against a sudden mass attempt to withdraw cash from banks is the
Which of the following has NOT slowed productivity in the last 30 years?
A. The effects of 9/11 B. The rising cost of health care C. The influence of special interest groups D. The high cost of computers
Under free trade, a large country produces one million leather bags per year and imports another two million bags per year at the world price of $60 per bag. Assume the country imposes a specific tariff of $5 per bag. As a result, the per-unit price of leather bags decreases to $58 in the international market and the import of leather bags drops to 1.6 million. The domestic production, on the other hand, increases to 1.1 million. Calculate the tariff revenue collected by the domestic government.
A. $8 million B. $10 million C. $4 million D. $13.5 million