A local Krispy Kreme doughnut shop reduced the price of its doughnuts from $4 per dozen to $3.50 per dozen, and as a result, the daily sales increased from 300 to 400 dozen. This indicates that the price elasticity of demand for the doughnuts was:
a. elastic.
b. inelastic.
c. of unitary elasticity.
d. indeterminate; more information is needed to determine the price elasticity of demand.
a
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In an economy with no income taxes or imports, if the MPC is .75, the multiplier is
A) 0.50. B) 4.00. C) 0.33. D) 3.00. E) 0.25.
The price of cotton clothing falls. As a result,
A) the quantity demanded of cotton clothing increases. B) the demand for cotton clothing increases. C) the quantity demanded of cotton clothing decreases. D) the demand for cotton clothing decreases. E) both the demand for cotton clothing increases and the quantity demanded of cotton clothing increases.
If the national debt is owed entirely to U.S. citizens,
a. paying off the debt will necessarily stimulate growth. b. future interest payments on the debt are not a burden to the nation as a whole. c. future economic growth will necessarily be slowed. d. the debt constitutes a burden to these citizens.
An individual demand schedule
What will be an ideal response?