When the price of good A is $50, the quantity demanded of good A is 500 units. When the price of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint method, the price elasticity of demand for good A is
a. 1.50, and an increase in price will result in an increase in total revenue for good A.
b. 1.50, and an increase in price will result in a decrease in total revenue for good A.
c. 0.67, and an increase in price will result in an increase in total revenue for good A.
d. 0.67, and an increase in price will result in a decrease in total revenue for good A.
c
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Assume that Honduras has a comparative advantage in producing bananas and exports bananas to Brazil. We can conclude that
A) Honduras has a lower opportunity cost of producing bananas relative to Brazil. B) Brazil has an absolute disadvantage in producing bananas relative to Honduras. C) Labor costs are higher for banana producers in Brazil than in Honduras. D) Honduras also has an absolute advantage in producing bananas relative to Brazil.
How do the fluctuations in the exchange rate influence the domestic price level?
According to the open-economy macroeconomic model, if the United States moved from a government budget deficit to a government budget surplus, U.S. real interest rates would increase and the real exchange rate of the U.S. dollar would appreciate
a. True b. False Indicate whether the statement is true or false
In comparing the European Union and the United States as OCAs, the authors of the text conclude that there is(are):
A) greater integration of goods markets and greater labor mobility in the United States than in Europe, but about the same symmetry of shocks in the two regions. B) greater integration of goods markets, greater labor mobility, and greater symmetry of shocks in the United States than in Europe. C) less integration of goods markets, but greater labor mobility and greater symmetry of shocks in the United States than in Europe. D) greater integration of goods markets, greater labor mobility, and greater symmetry of shocks in Europe than in the United States.