The Economics in Action in the text mentions that the elasticity of demand for agricultural products is 0.42. If a drought boosts the price of corn 25 percent, then we can calculate the quantity of corn demanded ________.
A) increased by 10.5 percent
B) decreased by 10.5 percent
C) increased by 8.4 percent
D) decreased by 8.4 percent
Question 2
In the above figure, suppose the economy is initially at point A. People come to expect the future U.S. exchange rate to be lower. As a result, there is a change from point A to a point such as ________.
A) point B
B) point C
C) point D
D) point E
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