Refer to the Information Provided in Figure 5

question 141

Multiple Choice

Refer to the information provided in Figure 5.3 below to answer the question(s) that follow. Figure 5.3
-Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $6 to $8, the price elasticity of demand equals ________ and demand is ________.

• A) -0.57; inelastic
• B) -1.75; elastic
• C) -1.9; inelastic
• D) -2.0; elastic

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Definitions:

Inflation

A general increase in prices and fall in the purchasing value of money over time.

Bureau of Labor Statistics

A United States government agency that collects, processes, and disseminates essential statistical data about labor markets, employment, and inflation.

GDP Deflator

The GDP Deflator is a measure of the price level of all domestically produced goods and services in a country, used to adjust nominal GDP to real GDP.

Nominal Interest Rate

The percentage increase in money you pay the lender for the use of the money you borrowed, not adjusted for inflation.