Price elasticity of demand measures:
A. the change in price brought about by a change in consumer demand.
B. how consumers change their purchases in response to a change in income.
C. how consumers change their purchases in response to a change in the price of a substitute good.
D. how consumers change their purchases in response to a change in the price of a product.
Answer: D
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A trend shows
A) the degree of correlation between two variables. B) the general tendency for a variable to rise or fall. C) the scale used to measure to variables. D) the increases in one variable.
If two economists completely agree about the magnitude of employment effects of a proposed change in government policy, but disagree about whether the change is a good idea. The difference in opinion
a. must be normative in nature b. is both positive and normative in nature c. is more likely to be normative than positive d. is more likely to be positive than normative e. would be neither positive nor normative in nature
The value of money varies
A. inversely with the average price level. B. directly with the volume of employment. C. directly with the average price level. D. directly with the interest rate.
Suppose that a 20% increase in the price of product X generates a 15% increase in the quantity of X supplied. The price elasticity of supply for good X is
A. less than 1 and therefore supply is inelastic. B. positive and therefore X is a normal good. C. negative and therefore X is an inferior good. D. more than 1 and therefore supply is elastic.