Knowing a Product's Price Elasticity of Demand Allows Economists to Predict

question 1

Multiple Choice

Knowing a product's price elasticity of demand allows economists to predict

• A) the amount by which quantity demanded will change in response to a change in price.
• B) how changes in consumers' income will affect sales.
• C) the amount by which quantity supplied will change in response to a change in price.
• D) how quickly consumers will respond to tariff changes.

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Definitions:

Trade Surplus

A situation where a country's exports exceed its imports, indicating a positive balance of trade.

GDP

Gross Domestic Product, a measure of the total economic output of a country, representing the total value of all goods and services produced over a specific time period.

European Monetary Union

An agreement among European Union member countries to adopt a single currency, the euro, and a single monetary policy governed by the European Central Bank.

Euro

The official currency used by 19 of the 27 European Union countries, also known by the acronym EUR.