Suppose that the price of eggs increases from 75 cents to $1.00 per dozen and as a result a typical farmer experiences a decrease in egg sales from 300 to 200 dozen per week. Using the method of average values, the absolute price elasticity of demand is
A) 1.4.
B) 0.8.
C) 3.0.
D) 1.75.
Answer: A
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A. John D. Rockefeller. B. Andrew Carnegie. C. Henry Ford. D. John Deere.
Decisions to buy or sell securities at the Fed are made by the:
A. Congress. B. Federal Open Market Committee. C. Federal Deposit Insurance Corporation. D. President's Council of Economic Advisors.
Because pollution taxes raise the costs of production for firms, firms:
A. will lower prices to consumers. B. must receive a higher price at every level of output. C. will increase the quantity produced at every price. D. will quit producing goods that generate pollution.
If the stock of money is $60 billion, velocity is 5, and real output is $100 billion, what is the price level?
A. 0.12 B. 1.4 C. 3 D. 6