Daniel's Consumption of Pizzas Drops from 6 Per Week to 4

question 59

Multiple Choice

Daniel's consumption of pizzas drops from 6 per week to 4 per week when the price rises from $9 to $11.His price elasticity of demand for pizza equals

• A)0.5
• B)1
• C)2
• D)0.08
• E)1.7

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Definitions:

Cash Flow Hedge

A strategy used in financial risk management to protect against the risk associated with fluctuations in cash flows due to changes in interest rates, foreign exchange rates, or other variables.

Initiation Date

The specific date at which a particular transaction, project, or contract begins.

Forward Contract

A bespoke contract involving two parties for the buying or selling of an asset at an agreed price on a designated future date.

Currency Option

An economic instrument granting the bearer the option to swap currencies at an established rate on a designated date, without the compulsion to proceed.