Refer to the information provided in Figure 5.3 below to answer the question(s) that follow.
Figure 5.3Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $6 to $8, the price elasticity of demand equals ________ and demand is ________.
A. -0.57; inelastic
B. -1.9; inelastic
C. -2.0; elastic
D. -1.75; elastic
Answer: D
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A) It is designed to establish nationwide minimum incomes for the aged, the blind, and the disabled B) Benefits are based on need. C) Recipients who receive benefit payments under Social Security are also eligible for SSI. D) It covers children and individuals with mental disabilities, including drug addicts and alcoholics.
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a. are essentially correct. b. contain one error; the lower gasoline prices would cause an increase in the quantity demanded of gasoline, not an increase in demand. c. contain one error; the lower gasoline prices would increase the quantity demanded of large cars, not the demand. d. contain two errors; the lower gasoline prices would cause the quantity of gasoline demanded (rather than the demand) to increase, and the lower gasoline price would cause an increase in quantity demanded (rather than the demand) for large cars.
Economists suggest that a market can fail if
A. no market for the product exists. B. governments dictate prices. C. producers get smaller profits than they desire. D. consumers have to pay more than they want to.
Which of the following is true of warranties?
A. They are not important costs in the business world. B. They increase contracting costs in the business world. C. They leave contracting costs unchanged in the business world. D. They reduce contracting costs in the business world.