If the Price Elasticity of Demand for Aluminum Foil Is

question 94

Multiple Choice

If the price elasticity of demand for aluminum foil is 1.45,then a 2.4% decrease in the price of aluminum foil will increase the quantity demanded of aluminum foil by

• A)1.66%,and aluminum foil sellers' total revenue will increase as a result.
• B)1.66%,and aluminum foil sellers' total revenue will decrease as a result.
• C)3.48%,and aluminum foil sellers' total revenue will increase as a result.
• D)3.48%,and aluminum foil sellers' total revenue will decrease as a result.

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Definitions:

Government Expenditures

The total amount of money that a government spends on public services, infrastructure, defense, and welfare programs.

Business Cycle

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

Marginal Propensity

Marginal propensity, in economics, refers to the fraction of an increase in income that is spent on consumption. It represents the change in consumption resulting from a change in income.

Government Spending

This refers to the total expenditure by government agencies on goods, services, and public works.