Suppose the price elasticity of demand for cigarettes is -0.4. The FDA decides to regulate tobacco production, which increases the price of cigarettes and causes the quantity of cigarettes demanded to decrease by 25 percent
What is the percentage increase in price which would lead to the 25 percent decrease in quantity demanded? If the price elasticity was -4, what would be the percentage increase in price?
If price elasticity of demand is -0.4, a 25 percent decrease in quantity demanded would result from a 62.5 increase in price.
If price elasticity of demand is -4, a 25 percent decrease in quantity demanded would result from a 6.25 increase in price.
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If Big Box Store has customers with identical demands, if it practices two-part pricing, the profit-maximizing user fee is ________ the marginal cost of Big Box Store's product.
A) less than B) greater than C) exactly double D) equal to
Concerns over unpleasant or unsafe standards of foreign labor do not affect most of U.S. trade because most U.S. trade is intra-industry and carried out with
a. high-income countries that have labor standards similar to the United States. b. low-income countries that have labor standards similar to the United States. c. high-income countries that have lower labor standards than the United States. d. low-income countries that have lower labor standards than the United States.
If the government cuts taxes by $200 million and simultaneously decreases government spending by $200 million, then
A. Aggregate demand will decrease by $200 million. B. Aggregate demand in the economy will remain unchanged. C. Aggregate demand will rise because the government decrease in purchases occurs so slowly. D. People will spend only part of their tax cut, so aggregate demand will eventually rise by $200 million.
Which of the following has NOT been a criticism of the "convergence process" for joining the Eurozone?
A) Although challenging, the process fully transforms inflation-biased nations into fiscal and monetary conservatives. B) Policies forced on applicants to monetary union are politically costly, so the interim peg may not be fully credible and may generate exchange rate crises. C) The fiscal rules are seen as inflexible and arbitrary. D) Once a nation has met the criteria, its commitment to fiscal discipline may wane.