The owner of a local pretzel cart has estimated that if he lowers the price of pretzels from $4.00 to $3.00, he will increase sales from 800 to 1,100 pretzels per day. Using the midpoint formula, the demand for pretzels is
A. perfectly elastic.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: D
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Total utility is constant along a given indifference curve
Indicate whether the statement is true or false
Interest rates in the economy have fallen. How will this affect aggregate demand and equilibrium in the short run?
A) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall. B) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall. C) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise. D) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise.
Critics of debt relief make all of the following arguments EXCEPT
A) it would be wasted money since the conditions that caused the debt would be likely to persist. B) countries with large foreign debts are poorly administered. C) debt relief can quickly fuel a new round of borrowing that simply restores debt to prior levels. D) debt relief will encourage other nations to borrow excessively with the hope that their debts may be forgiven in the future. E) the cost of debt relief to the most severely indebted countries is too large for the high income countries to afford.
What's the firm's contribution margin?
a. $1800 b. $800 c. $1000 d. $300