If the absolute value of the price elasticity of demand for a product is 2, and the price of a product increased 10 percent, then the quantity demanded will decline by
A. 2 percent.
B. 5 percent.
C. 10 percent.
D. 20 percent.
Answer: D
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The production possibilities curve illustrates the basic principle that
A. an economy’s capacity to produce increases in proportion to its population. B. if all resources of an economy are in use, more of one good can be produced only if less of another is produced. C. an economy will automatically seek that output at which all of its resources are employed. D. no opportunity cost exists in production.
Barriers to entry ________.
A. are characteristic of pure monopoly B. are typically the result of wrongdoing on the part of a firm C. usually result in perfect competition D. exist in economic theory but not in the real world
Within the framework of the aggregate expenditures model, which of the following is true?
a. When spending on goods and services exceeds the level business decision makers anticipated, inventories will rise. b. Equilibrium will always occur at the full-employment level of output. c. A nation's imports will decline as the nation's disposable income increases. d. When spending on goods and services exceeds the level of aggregate output, inventories will fall.
In a command economy:
a. economic effort is devoted to goals passed down from a ruler or ruling class. b. economic effort is commanded by the people of a country. c. there is no coordinated economic effort. What you produce is what you get to consume. d. economic effort is determined by the government, businesses, and the people of a country.