What Would Be the Consequences of a 10 Percent Decrease

question 64

Multiple Choice

What would be the consequences of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?

• A)A 50 percent decrease in quantity demanded
• B)A 5 percent increase in quantity demanded
• C)A 50 percent increase in quantity demanded
• D)A decrease in quantity demanded by 0.2
• E)An increase in quantity demanded by 0.2

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Definitions:

Proclamation of 1763

Royal directive issued after the French and Indian War prohibiting settlement, surveys, and land grants west of the Appalachian Mountains; caused considerable resentment among colonists hoping to move west.

Articles of Confederation

The original constitution of the United States, ratified in 1781, which was eventually replaced by the U.S. Constitution in 1789 due to its weakness in central governance.

National Government

A political organization holding sovereign authority over a country, responsible for its administration and law enforcement.

Economic Decisions

The choices made by individuals, households, businesses, and governments regarding the allocation of resources and engagement in economic activities.