Consider demand curve D in Figure 5-2. Between points F and G, the price elasticity of demand is
Figure 5-2
a.
1
b.
0.5
c.
2
d.
0.2
e.
none of these
b
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Which of the following factors will NOT increase economic development?
A) establishing a system of property rights B) increasing the amount of protectionism C) increasing the amount of education in the population D) creative destruction where old jobs, companies and industries are destroyed
Protectionist policies are designed to help domestic producers by making imported goods more costly or difficult to obtain
Indicate whether the statement is true or false
On the books of the Fed the difference between borrowed reserves and discount loans is equal to
A) excess reserves. B) required reserves. C) currency in circulation. D) zero; they are the same thing.
A market with a negative externality
a. will be regulated by the government b. is an example of a natural monopoly c. will be Pareto efficient, as long as bargaining costs are high enough d. will produce less than the efficient quantity, thereby creating a welfare loss e. will produce more than the efficient quantity, thereby creating a welfare loss