If the price of a soda increases from 75¢ to $1.00 and as a result the quantity demanded of sodas decreases from 10 to 9 per week, the elasticity of demand for sodas equals
A) 2.72.
B) 0.37.
C) 0.83.
D) 1.20.
B
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If demand is perfectly elastic, the absolute value of the price elasticity coefficient is
A) one. B) infinity. C) zero. D) equal to the absolute value of the slope of the demand curve.
Consider the two graphs above. Suppose that the domestic currency is expected to strengthen. This would ________ the desired level of the capital stock, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
A national park is an example of a pure public good, since it is there for everyone to enjoy
Indicate whether the statement is true or false
The trade deficit is the mirror image of the required capital inflows. So why worry about these capital inflows?
A. Trade deficits automatically cause larger budget deficits. B. Before long, the Germans, Japanese, and other foreigners will own the United States and will be dictating policy to the U.S. government. C. These capital inflows create debts on which interest and principal payments will have to be made in the future. D. During the period of trade deficits, personal consumption must be reduced to build up wealth to repay the debt created.