Price elasticity of demand is defined as
A) the percentage change in the quantity demanded of some product resulting from a one percent change in price.
B) the percentage change in the quantity demanded of some product resulting from a change in price.
C) the change in quantity demanded resulting from a one percent change in price.
D) the change in quantity demanded resulting from a change in price.
A
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Consider a worker who consumes a composite consumption good (on the vertical axis) and leisure hours (on the horizontal axis).
a. Suppose the worker has 80 hours of leisure per week and can earn a wage of $50 per hour. Illustrate the worker's weekly budget constraint. b. In order to close the deficit, the government introduces a broad-based consumption tax on all consumer goods -- raising the price of the consumption good by 20%. Illustrate the new budget constraint faced by our worker. c. On your graph, indicate the level of tax revenue raised by this broad-based consumption tax. d. Using your graph, discuss why this tax is inefficient. e. In this model is there any difference between the consumption tax and a wage tax? What is different about the real world that would change your conclusion about this? What will be an ideal response?
A change in input prices has no impact on a firm’s budget line.
Answer the following statement true (T) or false (F)
The single source of monopolies is economies of scale.
Answer the following statement true (T) or false (F)
When an economist is asked a question like "why is unemployment higher for teenagers than for older workers?" the economist
a. is asked to explain the cause of an economic event. b. is asked to recommend a policy to improve economic outcomes. c. is asked as a policy adviser. d. does not have enough information to respond.