Suppose that the percentage change in demand is 20%, the price elasticity of demand is 3, and the price elasticity of supply is 2. What is the percentage change in the equilibrium price?
A. 4%
B. 5%
C. 15%
D. 20%
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. A risk-averse individual chooses to never place a bet. 2. Firms are more likely to exhibit risk-neutral behavior than are individuals. 3. Both ex ante and ex post preferences depend solely on the individual's tastes. 4. When a gamble is repeated many times, the average outcome is the expected value. 5. A risk-free basket has only one possible outcome.
Efficiency wages can be used to
A. prevent self-selection of employees. B. reduce influencing activities. C. compare the relative performance of employees. D. retain firm-specific human capital.
Which of the following programs involves the Federal Reserve directly purchasing short-term lending instruments from corporations?
A. Term Asset-Backed Securities Loan Facility. B. Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. C. Commercial Paper Funding Facility. D. Term Securities Lending Facility.
Related to the Economics in Practice on p. 478: According to the "paradox of thrift," as individuals increase their saving
A. income in the economy will remain constant because the change in consumption equals the change in saving. B. income in the economy will fall because the decreased consumption that results from increased saving causes the economy to contract. C. income in the economy increases because there is more money available for firms to invest. D. income in the economy increases because interest rates will fall and the economy will expand.