The price elasticity of demand is measured by the
A) percentage change in quantity demanded divided by the percentage change in price.
B) percentage change in price divided by the percentage change in quantity demanded.
C) change in quantity demanded divided by the change in price.
D) change in price divided by the change in quantity demanded.
Ans: A) percentage change in quantity demanded divided by the percentage change in price.
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Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $5, what is the value of marginal product of the second worker?
A) $100 B) $20 C) $30 D) $125
In the regression model Yi = β0 + β1Xi + β2Di + β3(Xi × Di) + ui, where X is a continuous variable and D is a binary variable, β3
A) indicates the slope of the regression when D=1. B) has a standard error that is not normally distributed even in large samples since D is not a normally distributed variable. C) indicates the difference in the slopes of the two regressions. D) has no meaning since (Xi × Di) = 0 when Di = 0.
Inflation is costly only if it is unanticipated
a. True b. False Indicate whether the statement is true or false
In general, the longest lag for
a. both fiscal and monetary policy is the time it takes to change policy. b. both fiscal and monetary policy is the time it takes for policy to affect aggregate demand. c. monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand. d. fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand.