The price of a new toy increases from $5 to $7 and the quantity demanded decreases from 12,000 to 6,000 per month as a result. Based on this information, the price elasticity of demand (in absolute terms) is estimated to be equal to:
a. 0.5, indicating relatively elastic demand.
b. 0.5, indicating relatively inelastic demand.
c. 2.0, indicating relatively elastic demand.
d. 2.0, indicating relatively inelastic demand.
c
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Holding everything else constant, a country's imports will decrease if the:
A) country's currency appreciates. B) country's currency depreciates. C) country's currency is revalued. D) none of the above.
The use of data in economic models is important because
A) the model's predictive value rests on supportive evidence from real-world data. B) the models are always complex in nature. C) models must analyze every possible angle of the problem. D) social problems analyzed by economists require long streams of data.
Exhibit 8-6 Consumption function
?
In Exhibit 8-6, the level of autonomous consumption is:
A. $100. B. $150. C. $50. D. $0.
Export demand for commodities is affected by
A) A stronger U.S. dollar. B) Contractionary monetary policy which leads to higher U.S. interest rates relative to importing countries. C) Expansionary fiscal policy which leads to higher U.S. interest rates relative to importing countries. D) All of the above.