If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then the price elasticity of demand is equal to:
A. 2.
B. 0.05.
C. 0.5.
D. 5.
Answer: C
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The GDP deflator:
A. measures price changes for everything produced in the country. B. may include goods produced abroad. C. is computed using the quantities that are consumed in the economy each year. D. is the same as PPI.
Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. What are the opportunity costs of producing 1 orange for Alpha and Beta, respectively?
a. 0.25 apples; 0.5 apples b. 9 apples; 4 apples c. 0.5 apples; 0.25 apples d. 2 apples; 4 apples
Although price discrimination may increase the profits of drug companies, it reduces the incentive for drug companies to develop new drugs.
a. true b. false
You have an absolute advantage whenever you
A) are better educated than someone else. B) can produce more of something than others with the same resources. C) prefer to do one particular activity. D) can produce something at a lower opportunity cost than others.