The price elasticity of demand can be defined as ______.
a. the percentage change in price divided by the percentage change in quantity demanded
b. the percentage change in quantity demanded divided by the percentage change in price
c. the percentage change in price multiplied by the percentage change in quantity demanded
d. the percentage change in quantity demanded multiplied by the percentage change in price
b. the percentage change in quantity demanded divided by the percentage change in price
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The figure above represents the relationship between output and cost in an industry with an external cost. When output is at D, what distance represents the marginal external cost?
A) AB B) BC C) CD D) BD E) None of the above answers is correct.
If the government wants to generate large revenues from placing a tax on the consumption of a particular good, it should choose a good for which
a. the demand is price elastic b. the demand is unitary elastic c. the demand is price inelastic d. there are many good substitutes available for the good
Answer the following statement(s) true (T) or false (F)
1. A country or region’s comparative advantage is based on its natural resources and therefore does not change over time. 2. Because cocaine and stolen identity information are illegal, there are no markets for these items. 3. The market price reflects the value buyers place on a good or service and the cost to society of producing it. 4. Government price controls effectively endow the market price with meaning for buyers and sellers.
Barter refers to the direct exchange of goods and services for other goods and services.
Answer the following statement true (T) or false (F)