Explain how to calculate elasticity of demand
What will be an ideal response?
In order to calculate elasticity of demand, take the percentage change in the quantity of the good demanded, and divide this number by the percentage change in the price of the good. The result is the elasticity of demand for the good.
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An example of rational behavior in economics is
a. a firm seeking to minimize its losses in an economic downturn. b. a consumer wanting to maximize satisfaction. c. a country looking to maximize its output. d. All of these.
From 2006 through August 2011, the US dollar fell in value from 8 Chinese Yuan to 6.4 Chinese Yuan. During that time we would say that relative to the US dollar, the Yuan has appreciated in value
a. True b. False
Which of the following is not an example of a compensating differential?
a. Chris is a consultant who is paid more than other workers with similar skills because he is required to travel 80% of the time. b. Abby is a teacher who is paid less than other workers with similar skills because she does not have to work during the summer months. c. Ben is a businessman who is paid more than other workers with similar skills because he graduated from a prestigious university with honors. d. Daphne is a skyscraper window-washer who is paid more than other workers with similar skills because of the risk she faces in her daily job.
The figure above shows Tanya's consumption possibilities. Which of the following combinations of goods is not affordable?
A) 8 movie tickets and 3 restaurant meals. B) 12 movie tickets and 2 restaurant meals. C) 10 movie tickets and 3 restaurant meals. D) 6 movie tickets and 3 restaurant meals.