As the Price of Good X Rises from $1

question 85

Multiple Choice

As the price of good X rises from $1.50 to $1.75 the result is a decrease in the quantity demanded of good X from 650 units to 590 units. The price elasticity of demand for good X is _____________ and total revenue __________ as the price of good X rises from $1.50 to $1.75.

• A)0.63; falls
• B)1.59; rises
• C)1.59; falls
• D)0.63; rises

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Definitions:

Net Investment Spending

Represents the total amount spent on new capital assets minus the depreciation of existing assets, indicating how much a company is investing in its future growth.

Fiscal Policy

Government policies regarding taxation and spending to influence the economy.

Monetary Policy

Monetary policy refers to the process by which the central bank of a country manages the money supply and interest rates to influence economic activity and maintain economic stability.

Discretionary

Pertaining to funds or spending that is subject to decision or choice by a party or authority.