If at a Price of $24, Octavia Sells 36 Home-Grown

question 205

Multiple Choice

If at a price of $24, Octavia sells 36 home-grown orchids and at $30 she sells 24 home-grown orchids, the demand for her orchids is

• A)elastic.
• B)inelastic.
• C)unit elastic.
• D)perfectly elastic.

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Definitions:

European Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on a specified expiration date.

American Options

Options that can be exercised at any time up to the expiration date.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.

Put Option

An option contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.