A 4 percent reduction in the price of a product has zero effect on the dollar amount of consumer expenditure on the product. The price elasticity of demand is:
A. Zero
B. Greater than zero
C. Greater than zero but less than 1
D. Equal to 1
D. Equal to 1
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The table above shows the PPF of an island community. Choose the best statement
A. Suppose that this community produces 3 pounds of fish and 20 pounds of berries. If it decides to gather more berries, it faces a tradeoff. B. When this community produces 4 pounds of fish and 12 pounds of berries it faces a tradeoff, but it is inefficient. C. Suppose that this community produces 5 pounds of fish and 0 pounds of berries. If it decides to gather some berries, it will get a free lunch. D. If this community produces 3 pounds of fish and 22 pounds of berries, production is efficient but to produce more fish it faces a tradeoff.
Suppose a monopoly firm has an annual demand function of Qd = 20,000 - 250P, annual variable costs of VC = 16Q + 0.002Q2 and marginal cost of MC = 16 + 0.004Q, where Q is the annual quantity of output. In addition, the firm has an avoidable fixed cost of $25,000 per year. If this firm maximizes its profit, what is the value of aggregate surplus?
A. $247,250 B. $272,250 C. $242,000 D. $217,000
If residents of the United States give more gifts to relatives abroad than they receive, unilateral transfers will be
A) positive. B) unaffected. C) negative. D) zeroed out.
Grooming well for a big date is a
a. Screening mechanism b. Signaling mechanism c. Way to waste money d. None of the above