Because demand curves slope downward according to the Law of Demand, the price elasticity of demand is a negative number
What will be an ideal response?
True. The price elasticity of demand measures the change in quantity demanded when a price change occurs. If price increases, the change in the quantity demanded will be negative.
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All else constant, as the price of petroleum increases relative to the prices of other inputs to the production process, in their effort to minimize their total costs of production, we can expect to see firms employ:
A) less of each of the inputs of production. B) more petroleum and less of the other inputs to production. C) less petroleum and more of the other inputs to production. D) the same amount of petroleum since there are no substitutes for petroleum.
In 1975, Richard Petty won the NASCAR race in Richmond, earning $6265. In 2006, Dale Earnhardt, Jr., won the race, earning $239,166. The CPI index was 52.5 in 1975 and 198.7 in 2006 (base year = 1982-1984 )
Calculate the real earnings (based on base year 1982-1984 ) of both Petty and Earnhardt.