If the Elasticity of Demand for Oil Is 0

question 64

Multiple Choice

If the elasticity of demand for oil is 0.5 and the elasticity of supply for oil is 0.3, then a 1 percent increase in the supply of oil would cause the price of oil to:

• A) increase by 1.25 percent.
• B) increase by 2.50 percent.
• C) decrease by 1.25 percent.
• D) decrease by 2.50 percent.

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Definitions:

Intoxicated

The state of being under the influence of alcohol or drugs to a degree that significantly impairs one's physical and cognitive functions.

Repudiates

The action of refusing to accept, acknowledge, or be associated with; in contract law, it refers to the refusal to fulfill contractual obligations.

Sober

A state of being free from the influence of alcohol or drugs, characterized by clear thinking and the absence of intoxication.

Agency Agreement

A contract in which one party (the agent) agrees to act on behalf of another party (the principal) in business transactions.