When we use the midpoint method to compute the price elasticity of demand we use
A) the original quantity and the average price.
B) the original price and the average quantity.
C) the average price and the average quantity.
D) either the original or new price, and the average quantity.
E) the average price and the original quantity.
C
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Reverse causality can create confusion between correlation and causation. What does reverse causality imply?
What will be an ideal response?
In Figure 5-2, consumer’s surplus is measured by the area
A. ABC. B. OBCD. C. OACD. D. DCE.
In the short run, a change in the nominal exchange rate brings an equivalent change in the real exchange rate
Indicate whether the statement is true or false
Which of the following represents a price elastic supply?
A) The quantity demanded increases 18 percent as a result of a decrease in the price of 8 percent. B) The price rises by 8 percent causing the quantity demanded to fall by 10 percent. C) The quantity supplied increases by 21 percent as a result of an increase in the price of 12 percent. D) The price rises by 22 percent causing the quantity supplied to increase by 3 percent.