Gary consumes 10,000 units of electricity when his income is $500. When his income increases to $1,000, his consumption of electricity increases to 18,000 units. What is Gary's income elasticity of demand for electricity?
A) 0.5
B) 0.8
C) 1.8
D) 2
B
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Starbucks is considering opening a new store on the Drexel University Campus in Philadelphia
To analyze this decision Starbucks must compare the costs of starting the new store, which will be incurred today, with the profit the store will create in the future. When making this decision, the higher is the interest rate, the ________ is the discounted present value of the profits and the ________ likely Starbucks will be to open the store. A) higher; more B) higher; less C) lower; more D) lower; less
You just won the lottery. You have a choice of three different prize options. Option #1: receive $1,200 immediately Option #2: receive $1,500 a year from now Option #3: receive $5,000 five years from now. If the interest rate is 10% the ranking of the options, from the lowest present value to the highest is
a. Option #2, Option #3, Option #1 b. Option #3, Option #1, Option #2 c. Option #1, Option #2, Option # d. Option #1, Option #3, Option #2 e. Option #3, Option #2, Option #1
Which of the following statements best describes trade-offs?
a. With a trade-off, it is necessary to give up some of one good to gain more of the other good. b. Trade-offs are not determined by the relative prices of the goods. c. A trade-off is always represented by a straight vertical line. d. A trade-off is always represented by a straight horizontal line.
According to John Maynard Keynes, an economist must possess a rare combination of skills including being a mathematician, historian, statesman, and philosopher
a. True b. False Indicate whether the statement is true or false