If the Price of a Good Increases by 15% and Quantity

question 50

Multiple Choice

If the price of a good increases by 15% and quantity demanded changes by 20%,then the price elasticity of demand is equal to:

• A)0.75.
• B)approximately 0.33.
• C)approximately 1.33.
• D)1.

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Definitions:

Government Activity

Actions taken by a government to influence its country's economy, including policies and programs.

Voluntary Exchange

An economic transaction where both parties agree to trade goods or services by mutual consent without coercion.

Tax Revenue

The income that the government receives from taxation of individuals and businesses.

Federal Government

The national government of a federal state, which holds sovereignty over broad aspects of governance, such as defense, foreign affairs, and monetary policy.