The price elasticity of demand coefficient for gourmet coffee is estimated to be equal to 1.6 . It is expected, therefore, that a 10% increase in price would lead to:
a. a 16% decrease in the quantity of gourmet coffee demanded.
b. a 16% increase in the quantity of gourmet coffee demanded.
c. an 8% decrease in the quantity of gourmet coffee demanded.
d. an 8% increase in the quantity of gourmet coffee demanded.
a
You might also like to view...
Traffic congestion is an example of a ________
A) positive externality B) negative externality C) pecuniary externality D) free-rider problem
Investment in human capital implies:
a. investment on machines, technological development, and equipments. b. expenses on education. c. expenses on paying interest for hiring real capital. d. expenses on the purchase of land. e. profit of the entrepreneurs.
Which of the following is not correct?
a. Pairwise voting never produces transitive preferences. b. The order of pairwise voting can affect the result. c. Majority voting by itself does not tell us what outcome a society really wants. d. No voting system can satisfy all of the following properties: unanimity, transitivity, independence of irrelevant alternatives, and no dictators.
In preparing their estimates of the stimulus package's effect on GDP, Obama administration economists estimated a government purchases multiplier of 1.57. Economist Robert Barro argues that during wartime, the military expenditures multiplier would be
________ the administration's estimate of the government purchases multiplier, and economists Lawrence Christiano, Martin Eichenbaum, and Sergio Rebelo argued that when short-term interest rates are zero, the government purchases multiplier would be ________ the administration's estimate. A) higher than; lower than B) lower than; higher than C) higher than; equal to D) equal to; lower than