If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded, the price elasticity of demand equals
A) 1.33.
B) 0.75.
C) 4.00.
D) 3.44.
E) None of the above answers is correct.
B
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A deadweight loss
A) is possible only if the good is underproduced but is not possible if the good is overproduced. B) subtracts only from producer surplus. C) is a loss to consumers and a gain to producers. D) is a loss inflicted on the entire society.
More risk-averse people will:
a. hold fewer risky assets because marginal utility is rapidly diminishing. b. hold fewer risky assets because marginal utility is greater. c. hold fewer risky assets because rates of return are more uncertain. d. hold fewer risky assets because marginal utility is negative.
An increase in currency in circulation would ____ M1 and ____ M2. a. increase; increase
b. not change; increase. c. decrease; decrease. d. not change; decrease.
Which tax system requires higher-income taxpayers to pay a higher percentage of their income in taxes?
a. a progressive tax b. a proportional tax c. a regressive tax d. a lump-sum tax