Answer the following questions true (T) or false (F)
1. If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price.
2. If the absolute value of the price elasticity of demand for gasoline is 0.5, then a 10 percent increase in the price of gasoline leads to a 0.5 percent decrease in the quantity demanded.
3. If at a price of $10, a vendor sells 5 units of a product and at a price of $8, 6 units are sold. Using the midpoint formula, the demand for this good is inelastic.
1. FALSE
2. FALSE
3. TRUE
You might also like to view...
Describe the potential negative effects of an additional tax on the sale of all-terrain vehicles (ATVs) within the United States
What will be an ideal response?
Which of the following statements is true?
A) An economy's production possibilities curve is convex to the origin. B) The opportunity cost of producing a good decreases as more resources are used for its production. C) The production possibilities curve of a country is fixed in the short run. D) The slope of the production possibilities curve represents the terms of trade between two states.
A large farm uses fertilizer that nearby landowners complain may contaminate their water. Tests are conducted and contaminants are found. The costs resulting from this decision are referred to as
A) implicit costs. B) factor costs. C) external costs. D) opportunity costs.
If Congress voted to eliminate the minimum wage, which of the following would most likely occur?
a. Decrease in unit costs and an upward shift of the aggregate supply curve b. Decrease in unit costs and an upward movement along the aggregate supply curve c. Decrease in unit costs and a downward shift of the aggregate supply curve d. Increase in unit costs and an upward shift of the aggregate supply curve e. Increase in unit costs and an upward movement along the aggregate supply curve