An 36 percent increase in the price of small cars results in a 20 percent increase in the quantity supplied. The supply elasticity in this range equals ________.
A. 7/10
B. 9/5
C. 4/10
D. 5/9
Answer: D
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What could explain why South Korea's gross domestic product (GDP) per capita increased so much faster since the 1970s than North Korea's GDP per capita?
What will be an ideal response?
There are fifty low-risk people in a town and fifty high-risk people. A low-risk person has an average of $1,000 in medical expenses each year and is willing to pay $1,200 for medical insurance (this person is risk averse)
A high-risk person has an average of $2,000 in medical expenses each year and is willing to pay $2,400 for medical insurance. Insurance companies are unable to tell who is high-risk and who is low-risk. a. Show that an insurance company would lose money if it offered medical insurance at a price of $1,600 b. Show that if the insurance company offered medical insurance at a price of $2,200, low-risk people would not be insured. Calculate total surplus if the price is $2,200 c. Now suppose the government in this town passes a law that requires everyone to purchase medical insurance and sets the price of insurance at $1,600 . Calculate total surplus under this law. d. The 2010 Patient Protection and Affordable Care Act (commonly called the Affordable Care Act, or "Obamacare") includes an individual mandate that requires everyone to have health insurance. Does this question suggest that there is an efficiency argument in favor of the individual mandate? Defend your answer carefully.
According to the expectations theory of the term structure, the interest rate on a long-term bond will equal the ________ of the short-term interest rates that people expect to occur over the life of the long-term bond
A) average B) sum C) difference D) multiple
Indifference curves describe ________
A) the relationship between current and future income B) the utility received by an individual consumer C) the relationship between utility and income D) productivity levels