Suppose that in a month the price of a cup of coffee increases from $1 to $1.50. At the same time, the quantity of cups of coffee demanded decreases from 200 to 190. The price elasticity of demand for cups of coffee (calculated using the midpoint formula) is approximately:

According to the monetarist view, the aggregate supply curve is:

A. Upward sloping to the right. B. Perfectly vertical at the natural rate of unemployment. C. Flat or horizontal until full employment is reached. D. Flat or horizontal at all levels of output.

Explain the four assumptions on which the theory of consumer choice is based. Select one of these assumptions and explain what would happen if this assumption did not hold true

What will be an ideal response?