If the quantity of cookies purchased decreases by 30 percent as the result of a 15 percent increase in the price of oranges, the absolute value of the price elasticity of demand for cookies is
a. 0.25.
b. 0.50.
c. 1.25.
d. 2.0.
D
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If the Japanese government enters the foreign exchange market and purchases yen to maintain a specific exchange rate with the dollar, the dollar will ________ and the yen will ________
A) depreciate; depreciate B) depreciate; appreciate C) appreciate; depreciate D) appreciate; appreciate
Ricardian view on debt is that the form of government finance is irrelevant.
A. True B. False C. Uncertain
The Bretton Woods exchange rate system was an example of a
A) target zone. B) managed float. C) pure gold standard. D) modified gold standard. E) floating exchange rate system.
When the price level decreases, the resulting _______ in the interest rate will _____ investment.
a) decrease; increase b) decrease; decrease c) increase; increase d) increase; decrease e) none of the above