If the Price of Oil Goes Up by 50

question 107

Multiple Choice

If the price of oil goes up by 50 % and the quantity demanded goes down by 25%, the absolute value of the price elasticity of demand is

• A) 0.25.
• B) 0.50.
• C) 0.75.
• D) 1.00.

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Definitions:

Slope

The measure of the steepness or incline of a line on a graph, typically defined as the ratio of the rise over the run between two points.

Vertical Change

The alteration in the y-value or vertical position in a graph, often used in economic models to describe changes in price or quantity.

Seasonally Adjusted

A statistical technique that removes the influences of predictable seasonal patterns to show non-seasonal trends.

Unemployment Rate

The portion of people in the labor market who are without jobs and are searching for employment.