Suppose the Government of Nova Scotia Wants to Reduce the Consumption

question 51

Multiple Choice

Suppose the government of Nova Scotia wants to reduce the consumption of electricity by 5 percent. The price elasticity of demand for electricity is 0.40. You advise the Nova Scotia government to

• A)raise the price of electricity by 12.5 percent.
• B)raise the price of electricity by 2 percent.
• C)lower the price of electricity by 12.5 percent.
• D)stay away from the market for electricity and let the market mechanism fix the problem.
• E)lower the price of electricity by 2 percent.

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Definitions:

Mortgage Broker

A professional intermediary who facilitates the process of acquiring a mortgage loan for individuals or businesses.

Maturity

Maturity, in the context of finance, refers to the date on which the final payment of a loan or financial instrument must be paid back in full.

Line of Credit

A flexible loan from a bank or financial institution that offers a maximum loan balance that can be used over time.

Demand Note

A short-term loan that must be repaid (both principal and interest) in a lump sum at maturity.