Suppose that in a month the price of a cup of coffee increases from $1 to $1.50. At the same time, the quantity of cups of coffee demanded decreases from 200 to 190. The price elasticity of demand for cups of coffee (calculated using the midpoint formula) is approximately:
A. 0.13.
B. 0.5.
C. 7.8.
D. 20.
Answer: A
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Suppose that consumers become pessimistic about the future health of the economy. What will happen to aggregate demand and to output? What might the president and Congress have to do to keep output stable?
The table below shows the number of labor hours required to produce one umbrella and one bushel of corn in the United Kingdom and the rest of the world. The United Kingdom has an absolute advantage in the production of Labor hours to make:In the United KingdomIn the Rest of the World1 umbrella3.002.001 bushel of corn1.000.25
A. both corn and umbrellas. B. only corn. C. only umbrellas. D. neither corn nor umbrellas.
The labor supply curve bends backward because
A. income effects are greater than substitution effects at higher wages. B. substitution effects are greater than income effects at higher wages. C. income effects are greater than substitution effects at lower wages. D. substitution effects are greater than income effects at lower wages.
About 1.7 percent of elementary and secondary students were educated at home in 1999
a. True b. False