Elasticity of demand equals the ratio of the percentage change in the price of a good to the percentage change in the quantity demanded

Scarcity and shortages differ in that

A) scarcity is caused by natural disasters and shortages are caused by mistakes people make. B) scarcity is a condition of human life while shortages are usually temporary phenomena related to an imbalance between the amount desired and the amount produced. C) scarcity is a type of shortage but shortage is a broader concept. D) shortages apply to resource markets while scarcity applies to product markets.

The country of Meditor, a small country with a closed economy, uses the merit as its currency. Recent national income statistics showed that it had GDP of $600 million merits, no government transfer payments, taxes of $150 million merits, a budget surplus of $40 billion merits, and investment of $100 billion merits. What were its consumption and government expenditures on goods and services?

a. $460 million merits and $150 million merits b. $310 million merits and $190 million merits c. $350 million merits and $190 million merits d. $390 million merits and $110 million merits