A Peck Is 1/4 of a Bushel

question 16

Multiple Choice

A peck is 1/4 of a bushel.If the price elasticity of demand for peas is -0.10 when peas are measured in bushels, then when peas are measured in pecks, the price elasticity of demand for peas will be

• A)-0.10.
• B)-0.40.
• C)-0.03.
• D)-0.20.
• E)none of the above.

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Definitions:

Utility Possibilities Frontier

A graphical representation that shows the maximum amount of two goods that an economy can produce using all its resources efficiently, given the technology.

Contract Curve

In an Edgeworth box diagram, it represents the set of optimal distribution points for two traders based on their preferences.

Efficient Input Use

Utilization of inputs in a manner that maximizes the output or minimizes the cost under given technology and constraints.

MRTS

The Marginal Rate of Technical Substitution measures the rate at which one input can be substituted for another input in the production process, while keeping output constant.