If a normal good has a price elasticity of demand equal to 4, then:
a. a 1 percent increase in its price will increase quantity demanded by 4 percent.
b. a 1 percent increase in its price will decrease quantity demanded by 4 percent.
c. a 1 percent increase in its price will increase quantity demanded by 0.25 percent.
d. a 1 percent increase in its price will decrease quantity demanded by 0.25 percent.
b
You might also like to view...
The San Diego Zoo is an example of a club good
Indicate whether the statement is true or false
Tom quit his $65,000 a year corporate lawyer job to open up his own law practice. In Tom's first year in business his total revenue equaled $150,000 . Tom's explicit cost during the year totaled $85,000 . What is Tom's economic profit for his first year in business?
a. $0 b. $20,000 c. $65,000 d. $85,000
The main function of the Federal Reserve System is to:
Control the money supply Clear checks from member banks Serve as the fiscal agent for the Federal government Set reserve requirements of banks
If market signals result in pollution beyond the optimal level, then
A. The economy experiences government failure. B. The government is allocating resources inefficiently. C. The market mechanism has failed to achieve efficiency. D. A laissez faire approach will reduce the level of pollution.