If the Price of a Slice of Pizza Rises from $2.50

question 50

Multiple Choice

If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using the formula for arc price elasticity, what is the percentage change in price?

• A)18.18%
• B)29.89%
• C)20%
• D)16.67%

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Definitions:

National Output

The total value of goods and services produced by a country's economy over a specific period of time. It's synonymous with gross domestic product (GDP).

Crowding-Out Debate

A discussion on how government borrowing or spending may lead to reduced investment in the private sector due to increased interest rates or other mechanisms.

Keynesians

Economists and theories following the principles of John Maynard Keynes, emphasizing the role of government intervention to moderate economic cycles.

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Economists who generally favor policies that aim to promote free markets, low taxation, and minimal government intervention in the economy.