Refer to the information provided in Figure 5.7 below to answer the question(s) that follow.
Figure 5.7The above figure represents the market for pumpkins both before and after the imposition of an excise tax, which is represented by the shift of the supply curve.Refer to Figure 5.7. Using the midpoint formula, the price elasticity of demand for pumpkins from the equilibrium point before the imposition of the tax to the equilibrium point after the imposition of the tax is
A. -0.02.
B. -0.47.
C. -2.11
D. -4.43
Answer: C
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At a product's equilibrium price
A) anyone who needs the product will be able to buy the product, regardless of ability to pay. B) not all sellers who are willing to accept the price will find buyers for their products. C) the federal government will provide the product to anyone who cannot afford it. D) any buyer who is willing and able to pay the price will find a seller for the product.
Of the following, which best explains why Thomas Malthus was incorrect in his prediction that population would outstrip food supplies?
A) Malthus failed to realize that that human population would increase considerably. B) Malthus failed to recognize that economic growth is accompanied by smaller family sizes. C) Malthus incorrectly believed that economic growth would reduce birthrates. D) Malthus incorrectly predicted that modernization would increase the demand for children.
You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are a(n)
a. luxury good. b. inferior good. c. normal good. d. complementary good.
FarAwayDrive Inc. has recently increased the price of its golf balls from $40 to $6. In response to this increase in price, sales decreased from 2,200 to 1,800 units. If no other information concerning the demand is available, which of the following is true about the sensitivity of demand (using the ARC or midpoints formula) for FarAwayDrive's golf balls?
A. The ARC-elasticity (midpoints formula) of demand is 4/11 or .364. B. The ARC-elasticity (midpoints formula) of demand is 2/3 or .667. C. The ARC-elasticity (midpoints formula) of demand is 2.0. D. The ARC-elasticity (midpoints formula) of demand is ½ or .50.