A price elasticity of demand for a good or service of 1.8 tells us that:
A. the price rises by 1.8 percent when quantity demanded falls by 1 percent.
B. quantity demanded falls by 1.8 percent when price rises by 1 percent.
C. quantity demanded falls by 1.8 units when price changes by $1.
D. the price changes by $1.80 when quantity changes by 1 unit.
Answer: B
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An increase in which of the following would be most likely to increase long-run economic growth?
a) taxes b) interest rates c) consumer spending d) productivity e) value of domestic currency
Use supply and demand analysis to explain what is most likely to happen to the price and quantity of corn when there is an increase in the demand for ethanol, which is produced using corn. What other effects would such a change in the corn market have
on the price of beef, the price of farmland, and the price of corn syrup? Please provide the best answer for the statement.
Refer to the graphs, where the subscripts on the labels denote years 1 and 2. From the graphs we can clearly conclude that the economy:
A. is not at full employment in either year.
B. is at full employment in year 1 but not in year 2.
C. is at full employment in year 2 but not in year 1.
D. is at full employment in both years.
Joe runs a business and needs to decide how many hours to stay open. Figure 2.2 illustrates his marginal benefit of staying open for each additional hour. Suppose that we observe Joe staying open 5 hours per day
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