Suppose the quantity demanded of cigarette cartons falls by 5% when prices are increased by 100%. The price elasticity of demand for cigarettes is
A) elastic and equal to 0.05.
B) inelastic and equal to 0.05.
C) elastic and equal to 20.
D) inelastic and equal to 20.
A
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The Fisher equation implies that an increase in the nominal rate of interest relative to the real rate indicates that ________
A) inflation is expected to rise B) inflation is expected to decrease C) the real cost of borrowing has increased D) the real cost of borrowing has decreased E) none of the above
A demand curve shows how quantity demanded changes as the price changes. It implies that
a. only a change in price can shift a demand curve b. everything else that affects demand is assumed to be constant c. quantity demanded is unrelated to price d. economists are concerned only with money e. it is impossible to show how anything but price affects demand
Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement:
A. suggests that the supply of Blu-ray players has increased. B. suggests that the demand for Blu-ray players has increased. C. constitutes an exception to the law of demand in that they suggest an upward-sloping demand curve. D. constitutes an exception to the law of supply in that they suggest a downward-sloping supply curve.
Economists would classify all of the following as "land," except:
A. Two thousand acres of virgin forest B. A hydroelectric dam C. Crude oil reserves D. Iron ore deposits