If a 50 percent increase in the price of pizza results in a 25 percent decrease in the quantity demanded of pizza, then the price elasticity of demand for pizza:
a. is equal to 0.5 and demand for pizza is inelastic.
b. is equal to 0.5 and demand for pizza is elastic.
c. is equal to 2 and demand for pizza is elastic.
d. is equal to 2 and demand for pizza is inelastic.
e. cannot be determined from the information provided.
a
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If Japan seeks to control its exchange rates so that ¥100 = $1, which of the following policies should it NOT maintain?
a. interest rates that provide the same return as alternative international rates b. a stable rate of price level changes that will not cause currency depreciation or appreciation c. a willingness to raise interest rates when its currency begins to depreciate d. a willingness to raise price levels
Air pollution best illustrates
A. Market power. B. An inequity. C. Government failure. D. An external cost.