Price elasticity of demand is calculated as
a. the percentage change in quantity demanded divided by the percentage change in price
b. the percentage change in price divided by the percentage change in quantity demanded
c. the absolute change in quantity demanded divided by the absolute change in price
d. the absolute change in price divided by the absolute change in quantity demanded
e. none of the above
A
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A tariff hurts
A) the government by decreasing its revenue. B) domestic producers who can't compete with cheaper imports. C) consumers who pay more for the imported good. D) All of the above answers are correct.
In spring 2008, the U.S. Congress proposed to tax oil companies because of their near-monopoly status. This could have the unintended consequence of
A) increasing the equilibrium price by more than the tax. B) destroying the oil companies and leaving the United States without oil. C) increasing the profit of the best oil company. D) decreasing the power of the U.S. Congress.