Suppose an increase in supply lowers the price from $10 to $8 and increases and increases the quantity demanded from 100 units to 130 units. Using the midpoint method, the elasticity of demand equals what
A) 1.17.
B) 0.85.
C) 0.26.
D) 1.56.
E) None of the above answers is correct.
Answer: A) 1.17.
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A) The price level increases, and real GDP remains constant. B) The price level decreases, and real GDP remains constant. C) Real GDP increases, and the price level remains constant. D) Real GDP decreases, and the price level remains constant.
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A government-inhibited good is a good which
A) is not subject to the principle of mutual exclusivity. B) the political process has deemed socially undesirable. C) can be consumed by one individual without affecting the consumption of another individual. D) the political process has deemed socially desirable.
An annually budgeted budget can only be met if automatic stabilizers are effective
a. True b. False Indicate whether the statement is true or false