The Price Elasticity of Demand for Gourmet Coffee Is Estimated

question 48

Multiple Choice

The price elasticity of demand for gourmet coffee is estimated to be equal to 1.6. It is expected, therefore, that a 5 percent increase in price would lead to a:

• A)16 percent decrease in the quantity of gourmet coffee demanded.
• B)16 percent increase in the quantity of gourmet coffee demanded.
• C)8 percent decrease in the quantity of gourmet coffee demanded.
• D)8 percent increase in the quantity of gourmet coffee demanded.
• E)10 percent increase in the quantity of gourmet coffee demanded.

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Definitions:

Mechanical Isolation

A prezygotic reproductive isolating mechanism in which fusion of the gametes of two species is prevented by morphological or anatomical differences.

Sexual Isolation

A prezygotic barrier where different species are unable to mate successfully due to behavioral, physiological, or environmental differences.

Behavioral Isolation

A prezygotic reproductive isolating mechanism in which reproduction between similar species is prevented because each group exhibits its own characteristic courtship behavior; also called sexual isolation.

Gametic Isolation

A prezygotic reproductive isolating mechanism in which sexual reproduction between two closely related species cannot occur because of chemical differences in the gametes.