The Price Elasticity of New Automobile Purchases Is About 1

question 100

Multiple Choice

The price elasticity of new automobile purchases is about 1.2.This implies that an increase of $1,000 on a $10,000 automobile will

• A)reduce the number of autos sold by approximately 1.2 percent.
• B)increase the consumer expenditures on autos by approximately 1.2 percent.
• C)reduce the number of autos sold by approximately 12 percent.
• D)increase consumer expenditures on autos by approximately 12 percent.

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Definitions:

Collective Bargaining

The process where unions and employers negotiate over wages, working conditions, benefits, and other aspects of employment.

Legally Binding

An agreement or contract that is enforceable by law, where parties are obligated to fulfill their contractual duties.

Unionization

The process by which workers form or become members of a labor union to collectively bargain for better wages, working conditions, and benefits.

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The part of the economy that is controlled by the government, encompassing public services and enterprises.