Calculate the elasticity of supply when an increase in demand causes the equilibrium price and quantity to change from $2.00 and 500 to $2.80 and 1,000, respectively
Elasticity of supply = Percentage change in quantity supplied/Percentage change in price. Using the average quantities and average prices to calculate elasticity, we obtain: an elasticity of 2.0.
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A variable that induces a change in another variable is a(n):
A) dependent variable. B) independent variable. C) codependent variable. D) constant variable
As the world economy becomes more integrated through globalization
A) the Fed will find it easier to conduct monetary policy. B) the Fed will have a more difficult time reaching its money supply growth rate targets. C) the Fed will rely less on open market operations and more on changing the required reserve ratio when conducting monetary policy. D) U.S. interest rates will determine world interest rates.