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Musya8 [376]
3 years ago
9

Studies indicate that the price elasticity of demand for cigarettes is about 0.4. A government policy aimed at reducing smoking

changed the price of a pack of cigarettes from $2 to $6. According to the midpoint method, the government policy should have reduced smoking by (A) 30%.(B) 40%. (C) 80%. (D) 250%.(E) 5%.
Business
1 answer:
IrinaVladis [17]3 years ago
7 0

Answer:

(B) 40%

Explanation:

↓Q / ΔPrice = Price-elasicity

The price elasticity is the relationship between a change in price with the quantity demanded of a certain good assuming, other factor remains constant.

ΔPrice  = (P0 - P1)/((P0 + P1)/2) = (2 - 6)/((2+6)/2) = 4/4 = 1

We know that price elasticity is 0.4

Now we can solve for the change in the quantity demanded:

↓Q/ 1 = 0.4

↓Q = 0.4 x 1 = 0.40 = 40%

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Answer:

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The laws provide mechanisms for consumers to fight back against abusive business practices. If unchecked, sellers may take advantage of consumers' ignorance and low bargaining power.

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What is one specific requirement of a negotiable instrument?
Advocard [28]

Answer:

B

Explanation:

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Huck Finn is thinking about purchasing some stock in Mississippi Mining Company (MMC). Huck uses the price/earnings ratio techni
musickatia [10]

Answer:

Profit earning ratio of MMC = 10%

Explanation:

Given:

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Profit earning ratio (P\E ratio) =?

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Profit earning ratio (P\E ratio) = Current stock price / Yearly profit on each share

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4 0
3 years ago
17. When a business hires another company to
Lady bird [3.3K]

Transferring risk

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7 0
3 years ago
Calculate the values for each of the questions. Assume that in each country there are no taxes, international trade, or inflatio
Inessa [10]

Explanation:

a. The computation is shown below:

As we know that

Multiplier = 1 ÷ 1 - MPC

1.5  = 1 ÷ 1 - MPC

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Now the real GDP is

= Multiplier × Government spending

= 0.3333 × $70 billion

= $105 million

So the change in real GDP is

= $105 million - $70 million

= $35 million

b. The computation is shown below:

As we know that

Multiplier = 1 ÷ 1 - MPC

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So, multiplier is 2.5

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= Multiplier × Government spending

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c. As we know that

Real GDP = Multiplier × Government spending

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4 = 1 ÷ 1 - MPC

So, the multiplier is 0.75

3 0
3 years ago
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