The main reason for using the midpoint method to calculate an elasticity is that it
a. gives the same answer regardless of whether the price increases or decreases.
b. recognizes that prices are usually increasing, not decreasing.
c. rounds prices to the nearest dollar and quantities to the nearest whole unit.
d. uses fewer numbers than alternative methods.
Answer: A
Microeconomics
- An increase in the price level may be caused
- Which of the following events can cause short-term interest rates to increase?
- Suppose that wages increase sharply this year. Other things being equal a wide-spread increase in wages will have which of the following consequences for the U.S. economy?
- An unanticipated increase in inflation this year will
- If the US economy falls into a recession, then which of the following is likely to happen?
- In 1998, the U.S. economy was at full employment which means that
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- The price elasticity of demand for flights between RDU and Washington DC is equal to -3. A 20 percent decrease in air fare between RDU and D.C. will therefore result in
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- Which of the following is an example of a contractionary fiscal policy that can be used to decrease aggregate demand and prevent inflation?
- Which of the following statements about the federal budget deficit is true?
- As the economy expands the demand for money typically increases. Other things being equal, which of the following is a likely consequence of the increase in the money demand?
- Suppose the equilibrium GDP is greater than potential real GDP. Which of the following is likely?
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- Other things being equal, which of the following can cause a recession?
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- Which of the following statements is true?
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