When the price elasticity of demand is large, then
a. the product is more likely to be a necessity.
b. the responsiveness of quantity demanded to a change in price is small.
c. the percentage change in price divided by the percentage change in quantity demanded is large.
d. the responsiveness of quantity demanded to a change in price is large.
D
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Refer to the scenario above. What is the payoff to Firm A in equilibrium?
A) $2.4 million B) $2.6 million C) $5.2 million D) $3.0 million
Refer to the scenario above. If Aqua Inc charges a price of $20 for each unit of Good A while Blu Corp . charges a price of $60, Blu Corp . will ________
A) face the entire market demand B) lose all its customers to Aqua Inc. C) face a demand of 2,000 units D) face a demand of 1,500 units
Federal deficits amounted to 3.5 percent of the U.S. GDP by 2003 because of: a. the global financial crisis of 2002 that increased the rate of unemployment
b. an increase in the cost of fighting the war against terrorism. c. an improving stock market that decreased interest payment burdens for the government. d. a decrease in military and defense spending due to the end of the war in Iraq. e. an increase in welfare spending and Medicare expenses.
At one time, it was believed that the way for a nation to prosper was to export as much as possible while importing as little as possible. More money would flow into a country than out of a country. Is this really a sound economic strategy? What is the relationship between exports and imports?