The price elasticity of demand is defined as
a. the absolute change in price divided by the absolute change in quantity demanded.
b. the absolute change in quantity demanded divided by the absolute change in price.
c. the percentage change in quantity demanded divided by the percentage change in price.
d. the percentage change in price divided by the percentage change in quantity demanded.
c. the percentage change in quantity demanded divided by the percentage change in price.
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Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity supplied would increase, and the quantity demanded would decrease. B) The price would increase, quantity demanded would increase, and quantity supplied would decrease. C) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. D) The price would increase, the demand would increase, and the supply would decrease.
A tariff differs from a quota in that a tariff is a. levied on imports, whereas a quota is imposed on exports
b. levied on exports, whereas a quota is imposed on imports. c. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported. d. a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.