If a good's demand function is Q = 30 - 3P, then calculate the price elasticity of demand when
a. good price is $3 using the point elasticity formula
b. good price is $4 using the point elasticity formula
c. good price decreases from $4 to $3, using the arc elasticity formula
d. good price is $5, using the point elasticity formula
e. good price increases from $4 to $5, using the arc elasticity formula
(a) -0.429; (b) -0.667; (c) -0.538; (d) -1.000; (e) -0.818
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In order for a consumer to choose between two different goods, he has to take into consideration the
A) marginal utility of production. B) marginal utility divided by the price. C) marginal utility plus the price. D) total utility divided by price.
Exhibit 5-6Use the table below to answer the following question(s). Nominal GDP GDP Year(billions) deflator Year 1 600 100.0 Year 21,000 133.3 Refer to Exhibit 5-6. Measured in terms of Year 1 prices, real GDP in Year 2 was:
A. 600. B. 750. C. 900. D. 1,333.