A Government Wants to Reduce Electricity Consumption by 5

question 37

Multiple Choice

A government wants to reduce electricity consumption by 5%. The price elasticity of demand for electricity is -0.5. The government must ________ the price of electricity by ________.

• A) raise; 10.0%
• B) raise; 1.0%
• C) raise; 0.1%
• D) lower; 0.5%

---

Definitions:

Law Of Comparative Advantage

An economic principle that states countries should specialize in producing goods for which they have a lower opportunity cost of production relative to other countries, leading to increased economic efficiency and trade benefits.

Gain From Trade

The benefits that entities receive from exchanging goods, services, or resources with others, often leading to an increase in overall welfare.

Law Of Comparative Advantage

A principle in international trade that states countries should specialize in producing goods for which they have a lower opportunity cost than their trading partners.

Foundation

An organization established to support charitable activities, educational goals, or other purposes that contribute to the public good.