If the price elasticity of demand for clothing is 0.64, this implies that
A) a 6.4 percent increase in price the price of clothing leads to a 10 percent decrease in the quantity demanded.
B) a 10 percent increase in the price of clothing leads to a 6.4 percent decrease in the quantity demanded.
C) if there is an increase in the price of clothing the total expenditures on clothing decreases.
D) Both answers A and C are correct.
B
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Let C = 800 + 0.6y and I = 100. Assume no government or foreign sectors. If investment decreases by 40, then the value of the multiplier is
A) -2.5. B) -1.67. C) 1.67. D) 2.5.
Refer to the above table. Assuming that opportunity costs are constant, the opportunity cost of producing a bicycle in the United States is equal to ________, and the opportunity cost of producing a bicycle in Mexico is ________
A) 4 computers; 0.5 computer B) 0.25 computer; 2 computers C) 2.67 bicycles; 0.33 computers D) 0.375 computer; 3 bicycles
In 2010, the highest quin tile of the income distribution earned approximately
a. 5 percent of aggregate income. b. 10 percent of aggregate income. c. 15 percent of aggregate income. d. 50 percent of aggregate income.
Keynesian economists believe monetary policy is more effective than fiscal policy in stabilizing the business cycle
a. True b. False Indicate whether the statement is true or false