If the quantity demanded of a good falls by 2% when income falls by 10%, the good's demand elasticity is:
A. 0.2.
B. 5.
C. 1.
D. 0.5.
Answer: A
You might also like to view...
Ideally, insurance companies would like to charge
a. High premium to low risk clients b. Low premium to high risk clients c. The same premium to all clients d. High premium to high risk and low premium to low risk clients
A real variable is
a. measured in terms of after-tax dollars b. measured in terms of dollars and not foreign currency c. measured in nominal terms d. measured in terms of current dollars e. measured in terms of purchasing power
The trade-off between the present and future consumption is measured by
A) the money cost of both the present and future consumption. B) the foregone present consumption. C) the difference between the money price of future goods and the money cost of producing them. D) the difference between the money price of present goods and the money cost of producing them.
Which of the following statements is the best example of the term ceteris paribus?
A) An economist holds other factors constant when he examines the relationship between tax rates and tax revenues. B) More money should be spent on cleaning up the environment. C) The government budget surplus was $200 billion in 2000 because the economy was growing. D) An increase in the budget surplus after an increase in tax rates implies that tax rate increases cause budget surpluses. E) When studying the effects of a budget deficit, an economist must take account of all the factors involved.