Assume that the price elasticity of demand for a commodity is 0.20 . A 10 percent increase in the price of the commodity will be followed by a:
a. 20 percent increase in the quantity demanded.
b. 2 percent decrease in the quantity demanded.
c. 20 percent decrease in the quantity demanded.
d. 0.2 percent decrease in the quantity demanded.
e. 2 percent increase in the quantity demanded.
b
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If there is an increase in the number of discouraged workers in a country, ________
A) the unemployment rate will decrease B) the labor force participation rate will increase C) the unemployment rate will increase D) the labor force participation rate will decrease
Government intervention will not be necessary when voluntary contracting internalizes an externality. Which of the following is NOT a necessary condition for this to occur?
A) well-defined private property rights B) low transaction costs C) large numbers of individuals involved in the transactions D) low contract enforcement costs
What is not true about interest income derived from loanable funds? It
a. is considered to be the profit due to an entrepreneur b. originates in theft of property, according to Marxists c. is the reward for an earlier decision to postpone consumption d. is justified because savers have property rights to their savings and are entitled to the rewards they generate e. is paid in the loanable funds market
Suppose the market basket consists of 100X, 200Y, and 300Z. Current-year prices are $5 for each unit of X, $2 for each unit of Y, and $3 for each unit of Z. Base-year prices are $2 for each unit of X, Y, and Z. What is the approximate CPI in the current year?
A) 15 B) 70.20 C) 1,200 D) 150