If the Price of Cell Phones Increases by 5 Percent

question 48

Multiple Choice

If the price of cell phones increases by 5 percent and the quantity demanded falls by 2 percent,the absolute value of the price elasticity of demand is

• A)5.0.
• B)0.4.
• C)2.1.
• D)5 percent.

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Definitions:

Deferred Annuity

An insurance contract in which payment of annuities is delayed to a future date.

Compounded Annually

The process where interest is calculated and added to the principal amount once every year, leading to an increase in the interest amount for the following year.

Deferral Period

A set period during which payments of principal or interest on a loan are temporarily delayed.

Perpetual Scholarship

A scholarship fund that provides financial aid indefinitely, usually through an endowment that generates interest used to fund the scholarship.