If the Elasticity of Demand for Cigarettes Is 0

question 238

Multiple Choice

If the elasticity of demand for cigarettes is 0.75 and the elasticity of supply for cigarettes is 1.25, then a 5 percent decrease in the demand for cigarettes would cause the price of cigarettes to:

• A) increase by 2.5 percent.
• B) increase by 5 percent.
• C) decrease by 2.5 percent.
• D) decrease by 5 percent.

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Definitions:

Spotlight Effect

The idea that one's actions and appearance draw more observation from others than truly happens.

Self-serving Bias

A common cognitive bias that leads individuals to attribute success to personal factors while attributing failures to external factors, protecting self-esteem.

Disparage

To belittle or depreciate someone or something; often reflecting a perceived difference in value or status.

Older Self

Refers to an individual's perception, representation, or embodiment of their future older identity or self.