Author Question: Assume that the price elasticity of demand for a commodity is 0.20 . A 10 percent increase in the ... (Read 193 times)

ts19998 · **on:** Jun 30, 2018

Assume that the price elasticity of demand for a commodity is 0.20 . A 10 percent increase in the price of the commodity will be followed by a:
a. 20 percent increase in the quantity demanded.
b. 2 percent decrease in the quantity demanded.
c. 20 percent decrease in the quantity demanded.
d. 0.2 percent decrease in the quantity demanded.
e. 2 percent increase in the quantity demanded.

Question 2

In consumer equilibrium, the marginal utility of good A, B and C are 100, 300, and 400 respectively. If the price of good A was 35, then the prices of goods B and C, respectively, are:
a. 105 and 140.
b. 140 and 105.
c. 105 and 175.
d. 140 and 175.