A Good Has a Price Elasticity of Demand Equal to 2

question 71

Multiple Choice

A good has a price elasticity of demand equal to 2. If new imports lower its price from $1.20 to $0.80, the percentage change in quantity demanded will be

• A)an increase of 80 percent.
• B)a decrease of 80 percent.
• C)a decrease of 40 percent.
• D)an increase of 2 percent.
• E)an increase of 40 percent.

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Definitions:

Skeletal

Relating to or functioning as a part of the skeleton, the internal framework that supports and determines the shape of an organism.

Cardiovascular

Relating to the heart and blood vessels and their functions in circulating blood throughout the body.

Negative Feedback

A regulatory mechanism in which a stimulus causes an opposite output in order to maintain an ideal level of whatever is being regulated.

Effector

A muscle, gland, or organ that responds to a stimulus from the nervous system by producing a specific effect or action.