How do economists compute the price elasticity of demand?
a) the percentage change in the price divided by the percentage change in quantity demanded
b) the percentage change in income divided by the percentage change in the quantity demanded
c) the percentage change in the quantity demanded divided by the percentage change in price
d) the percentage change in the quantity demanded divided by the percentage change in income
Answer: c) the percentage change in the quantity demanded divided by the percentage change in price
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If you buy an insurance policy with a high deductible and co-payments, you would end up paying
a. A higher premium b. A lower premium c. The premium of a low risk individual d. Both B&C
If in the market for apples the supply has decreased, then
A) the supply curve for apples has shifted to the right. B) there has been a movement upwards along the supply curve for apples. C) the supply curve for apples has shifted to the left. D) there has been a movement downwards along the supply curve for apples.