Suppose you are the manager of a local water company, and you are instructed to get consumers to reduce their water consumption by 10 percent. If the price elasticity of demand for water is -.25, by how much would you have to raise the price of water?
a. 10 percent
b. 25 percent
c. 40 percent
d. 100 percent
C
You might also like to view...
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
In a subgame-perfect equilibrium
A) each player's strategy constitutes a Nash equilibrium at every subgame of the original game. B) the last mover has an advantage over other players. C) the first mover has an advantage over other players. D) each player has the same response as the others at every subgame of the tree.
Which of the following is least likely to lead to inflationary monetary policy?
A) rising unemployment B) expanding federal budget deficits C) declining oil prices D) conflict in the Middle East
Which of the following would be included in this year's GDP?
a. the value of a used car, at its sale price b. the value of a new domestic automobile, at its sale price c. a sale of Microsoft stock from one individual to another d. the face value of a life insurance policy paid to a woman at the death of her husband