A 10 percent increase in the price of tablets leads to a 10 percent decrease in the quantity demanded of tablets. The absolute price elasticity of demand for tablets is
A) 3.
B) 0.3.
C) 1.
D) 10.
C
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Strategic situations are more likely to arise when the number of decision-makers is very large rather than very small.
Answer the following statement(s) true (T) or false (F)
Bobby consumes only chocolate ice cream and vanilla ice cream. He is spending all of his income
His marginal utility of chocolate is 200 and his marginal utility of vanilla is 200, and the price of chocolate is $1.00 per scoop and the price of vanilla is $2.00 per scoop. To maximize his utility, Bobby should A) buy more chocolate ice cream and less vanilla ice cream. B) buy more vanilla ice cream and less chocolate ice cream. C) not change his purchases between chocolate ice cream and vanilla ice cream. D) buy no vanilla ice cream.
Jack and Diane each buy pizza and paperback novels. Pizza costs $3 per slice, and paperback novels cost $5 each. Jack has a budget of $30, and Diane has a budget of $15 to spend on pizza and paperback novels. Which consumer(s) can afford to purchase 3 slices of pizza and 4 paperback novels?
a. Jack only b. Diane only c. both Jack and Diane d. neither Jack nor Diane
Suppose you are a risk-neutral manager attempting to hire a new sales manager. All of the workers in the market have the same ability to manage and sell, but they differ with respect to the wage at which they are willing to work for your company. The market for sales managers is composed of two types of individuals: 35 percent are willing to work for $50,000 and 65 percent are willing to work for $75,000. The first interviewee is only willing to work for $75,000. The expected benefit from an additional search is:
A. $26,250. B. $8,750. C. $16,250. D. $32,500.