When the Price of a Good Is $5,the Quantity Demanded

question 61

Multiple Choice

When the price of a good is $5,the quantity demanded is 100 units per month;when the price is $7,the quantity demanded is 80 units per month.Using the midpoint method,the price elasticity of demand is about

• A)0.22.
• B)0.67.
• C)1.33.
• D)1.50.

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Definitions:

Balanced Budget

A financial plan whereby revenues and expenditures are equal, resulting in no deficit for the given period.

Business Cycle

The fluctuations in economic activity that an economy experiences over a period of time, typically characterized by periods of boom and recession.

Balanced Budget Rule

A fiscal policy regulation requiring that a government's spending does not exceed its income in a given period.

Recession

A period of economic decline across an economy lasting several months, typically recognized by a decrease in GDP, income, employment, and trade.