Suppose When the Price of Pizza Goes from $8 to $12

question 37

Multiple Choice

Suppose when the price of pizza goes from $8 to $12 per pie, production increases from 2,500 pies to 4,000 pies per month. Using the mid-point method, what is the percentage change in price?

• A) 40 percent
• B) 46 percent
• C) 50 percent
• D) 33 percent

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Definitions:

Monetarism

An economic theory which argues that the management of the economy should be primarily based upon adjustments to the monetary supply, by governmental policies.

Obsession

A persistent and intrusive thought or idea that preoccupies a person's mind, often leading to compulsive behavior.

Quantity Theorists

Economists who believe that the quantity of money available in an economy significantly affects its price levels and inflation rates.

Inflation

The rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of money.