A value of the absolute price elasticity of demand equal to 0.25 indicates that
A) a 5% decrease in price leads to a 2% increase in quantity demanded.
B) a 2% decrease in price leads to a 25% increase in quantity demanded.
C) a 1% decrease in price leads to a 2.5% increase in quantity demanded.
D) a 0.25% decrease in price leads to a 1% increase in quantity.
A
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In the 1980s, a new category entitled ________ was added to M1
A) money market mutual fund deposits B) other checkable deposits C) demand deposits D) traveler's checks
In monopolistic competition, product improvement and development
A) are valued by the consumer at an amount equal to the costs the producers have incurred. B) yields a marginal benefit to the producer equal to price of the good. C) is less than its efficient amount. D) None of the above answers are correct.
In the quantity equation framework for understanding the determinants of long-run inflation, a depreciation of the exchange rate ________ velocity, putting ________ pressure on inflation
A) raises, upward B) raises, downward C) lowers, upward D) lowers, downward
When the United States imposed a tariff on imported shrimp, a Vietnamese official said: "If the tariffs are imposed, that will mean fewer shrimp for the U.S. market and higher prices for consumers. So the U.S. government position hurts its own people. That's irrational." The imposition of tariffs by the United States in this case illustrates:
A. the good/bad paradox that what is good economics is always bad politics and vice versa. B. that U.S. consumers are either irrational or altruistic because they are willing to pay higher prices to help the U.S. shrimp industry. C. what the text calls the general rule of political economy, which states that often small interest groups lobby better than large groups. D. that the U.S. government, like all governments, is sometimes irrational.