Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals
A) 2.5.
B) 1.29.
C) 0.78.
D) 0.06
B
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Discuss how the marginal propensity to consume, imports, and marginal tax rates influence the expenditure multiplier
What will be an ideal response?
In the aggregate demand-aggregate supply model, if entrepreneurs become convinced that future profitability of capital has increased,
A) current output will fall, but the price level will rise. B) current output will rise, but the price level will fall. C) current output and the price level will both rise. D) current output and the price level will both fall.
Suppose your best friend's birthday is next week and you are willing to pay $300 for a gift of Rollerblades, but you found them on sale for $200 at Sportsmart. Lucky? Yes. Your consumer surplus is
a. $300 b. $600 c. $100 d. $200 e. $500
Refer to the figures. Which of the following events would most likely result in inflation?
A. A shift from D 2 to D 1 in Figure A.
B. A shift from D 2 to D 3 in Figure A.
C. A shift from D 2 to D 1 in Figure B.
D. A shift from D 2 to D 3 in Figure B.