If the price elasticity of demand for a product is -2.5, then a price cut from $2.00 to $1.80 will  ________ the quantity demanded by about  ________.

A. decrease; 2.5%
B. increase; 25%
C. increase; 250%
D. increase; 2.5%


Answer: B

Economics

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Assume that the marginal propensity to consume in an economy is 0.9. If the economy's full-employment real GDP is $500 billion and its equilibrium real GDP is $550 billion, there is an inflationary expenditure gap of

A. $5 billion. B. $500 billion. C. $100 billion. D. $50 billion.

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According to the World Bank, in 2006, China's GDP was approximately $2.7 trillion (or $2,700 billion). That same year, India's GDP was approximately $906.3 billion

With which of the following populations would China's standard of living have been considered higher than India's that year? A) China's population = 500 million; India's population = 125 million B) China's population = 8.3 billion; India's population = 1.1 billion C) China's population = 1.3 billion; India's population = 1.1 billion D) China's population = 3.5 billion; India's population = 1.1 billion

Economics

A major factor in the creation and proliferation of comprehensive health care insurance is _____

a. the health care tax credit b. the tax deductibility of employer-paid health plans c. the tremendous increase in the hard core poor d. the increase in low-cost lifesaving techniques

Economics

The concept of comparative advantage applies:

a. only to people with at least a high school diploma. b. only to people who are currently employed. c. to situations in which you have information about the salary levels of those with whom you are competing for a job. d. to every case of trade or exchange. e. only to goods that are sold in the domestic market.

Economics