Because of an Increase in the Price of Leather, the Price

question 496

Multiple Choice

Because of an increase in the price of leather, the price of a pair of women's dress shoes increased 12 percent. If the price elasticity of demand for women's dress shoes is 0.85, which of the following will happen?

• A) Total expenditure on women's dress shoes decreases.
• B) The number of pairs of women's dress shoes demanded decreases by 10.2 percent.
• C) Total revenue from the sale of women's dress shoes decreases.
• D) none of the above

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Definitions:

Average Tax Rate

The percentage of the total income that is paid as taxes, calculated by dividing the total amount of taxes paid by the taxpayer's total income.

Personal Income

The total amount of income received by an individual or household from all sources before taxes and deductions.

Marginal Tax Rate

The rate at which the last dollar of a person's income is taxed.

Personal Income

The total amount of income earned by individuals, including wages, salaries, investments, and other sources before taxes.