What would be the consequence of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?
a. A 50 percent decrease in the quantity demanded
b. A 5 percent increase in the quantity demanded
c. A 50 percent increase in the quantity demanded
d. A decrease in the quantity demanded by 0.2 units
e. An increase in the quantity demanded by 0.2 units
c
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The time it takes to formulate a policy is known as
A) inside lags. B) crowding out. C) outside lags. D) fiscal policy.
Representative commodity money retained its value because
A) it was an actual commodity. B) it was a fiat money. C) it was backed by the government. D) it could be exchanged for an actual commodity.
In the figure above, for the 3,000th unit, the maximum price a consumer is willing to pay is
A) $5. B) $10. C) $15. D) $0. E) $25.
The difference between the marginal social cost and the private cost of a common property resource represents:
A) the social discount rate. B) a deadweight loss. C) is generally negative because the people who use the resources assign higher value to them than other members of society. D) the opportunity cost of reducing the resource by one unit for other members of society.