Using the table above, what is the elasticity of demand between the prices of $9 and $7?
A) 1/4
B) 1
C) 2
D) 4
E) 6
D
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Refer to Figure 12.3. Suppose that after a negative supply shock, the economy is at point X in the IS-MP model and at point B on the Phillips curve. If the Fed has a goal of price stability, the economy would ________ in the IS-MP model and ________ on the Phillips curve.
A) move to point Y; move to point C B) remain at X; move to point A C) move to point Y; remain at point B D) move to point Z; move to point A
A pessimistic view of the 1986 tax reform is that Congress simplified the tax code _____
a. because it represented a Pareto superior move b. created new loophole opportunities that did not exist previously c. in order to increase the efficiency in the system d. because it was in the best interests of the special interests