Suppose that the percentage change in supply is 20%, the price elasticity of demand is 3, and the price elasticity of supply is 2. What is the percentage change in the equilibrium price?
A. 4%
B. 5%
C. 15%
D. 20%
Answer: A
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There is only one firm in a small island country. The firm produced 1,000 units of Good X during a particular year out of which it could sell 900. If each unit of the good sells for $500, what is the gross domestic product of the country?
A) $150,000 B) $450,000 C) $40,000 D) $500,000
The U.S. monetary policy implemented in 2008 was an attempt to
A) give billions of dollars to businesses and low- and middle-income Americans in order to stimulate business investment and consumption expenditure and thereby increasing AD. B) decrease interest rates in order to stimulate business investment and consumption expenditure, thereby increasing SAS. C) decrease interest rates in order to stimulate business investment and consumption expenditure, thereby increasing AD. D) decrease the exchange rate in order to boost net exports, thereby increasing AD.
Opportunity cost is the
a. cost incurred when one fails to take advantage of an opportunity. b. cost incurred in order to increase the availability of attractive opportunities. c. cost of the best option forgone as a result of choosing an alternative. d. drudgery of the undesirable aspects of an option.
The cost of the CPI basket in base-period prices is $200 and the cost of the CPI basket in current-period prices is $450. The CPI in the current year is
A) 300. B) 250. C) 225. D) 44.44. E) 450. C) 225.