The quantity of new cars increases by 10 percent. If the price elasticity of demand for new cars is 1.25, the price of new cars will fall by
A) 2.5 percent.
B) 8 percent.
C) 10 percent.
D) 12.5 percent.
B
You might also like to view...
The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average, the cost of goods and services is
A) 5% higher in year 1 than in year 2. B) 105% higher in year 1 than in year 2. C) 105% higher in year 2 than in year 1. D) 5% higher in year 2 than in year 1.
The elements of an effective legal system include ________
A) strict limits on the ability of judges to interpret law B) a temperate climate C) a large body of legislators D) an adequate supply of lawyers
The most common form of trading goods for goods is
A. bilateral trade. B. government commodity distribution. C. status-based trades. D. barter. E. payments in kind.
What does it mean when a country’s exchange rate weakens?
a. Its currency appreciates. b. Its currency gains in value. c. Its currency falls in value. d. Its currency buys more imports.