A 10 percent decrease in advertising results in a 5 percent sales ...

[rosent76]

A 10 percent decrease in advertising results in a 5 percent sales decrease. The advertising elasticity of demand is ________.
 
  A) -2.0
  B) -0.5
  C) 0.5
  D) 2
  E) none of the above

Question 2

Consider the following statements when answering this question. I. As Boeing's production fell 10 to 100 planes last year, learning by doing cannot account for this year's changes in long-run average costs. II.
 
  Failure to take into account the effects of learning by doing will lead to overestimates of the cost-output elasticity. A) I is true, and II is false.
  B) I is false, and II is true.
  C) Both I and II are true.
  D) Both I and II are false.

[CourtneyCNorton]

Answer to Question 1

C

Answer to Question 2

B