Price elasticity of demand is the:
A. change in the quantity demanded of a good divided by the change in the price of that good.
B. percentage change in price of that good divided by the percentage change in the quantity demanded of that good.
C. change in the price of a good divided by the change in the quantity demanded of that good.
D. percentage change in quantity demanded of a good divided by the percentage change in the price of that good.
Answer: D
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In the figure above in the market for high-skilled labor, the equilibrium wage rate is
A) $16. B) $8. C) $20. D) $28.
All of the following are true, except
a. Some consumers may infer high prices of a good to signal high quality b. Low prices can also signal high quality c. Promotional campaigns do not affect consumer's perception on quality d. It makes more sense to raise price when advertising makes demand less elastic