Price elasticity of demand refers to the ratio of the:
a. percentage change in price of a good in response to a percentage change in quantity demanded.
b. percentage change in price of a good to a percentage increase in income.
c. percentage change in the quantity demanded of a good to a percentage change in its price.
d. none of these.
c
You might also like to view...
Suppose the value of the CPI is 1.100 in year one, 1.160 in year two, and 1.270 in year three. Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three. The price level is increasing, the inflation rate is ________, and the relative price of computers is ________.
A. increasing; decreasing B. constant; increasing C. increasing; increasing D. constant; decreasing
After the sugar substitute saccharin was found to cause cancer in laboratory mice, its price dropped dramatically. This change in the price was because
A) the supply of saccharin decreased. B) the demand for saccharin decreased. C) the government ordered the price reduction. D) saccharin producers felt sorry for their past customers and were making an honest attempt to compensate them.
When the price faced by a competitive firm was $5, the firm produced nothing in the short run. However, when the price rose to $10, the firm produced 100 tons of output. From this we can infer that
A) the firm's marginal cost curve must be flat. B) the firm's marginal costs of production never fall below $5. C) the firm's average cost of production was less than $10. D) the firm's total cost of producing 100 tons is less than $1000. E) the minimum value of the firm's average variable cost lies between $5 and $10.
The SMarT program is designed to overcome which common barrier to saving?
A. Status-quo bias B. An unwillingness to forgo current consumption C. The program was designed to overcome both A and B. D. The program was designed to overcome neither A nor B.