In the circular flow diagram with government, what does the government receive from factor markets?
goods and services
expenditures
taxes
land, labor, and capital
The government receives taxes from factor markets in the circular flow diagram.
What is the elasticity of demand for peanut butter when the price changes from $2.00 to $0.40 as shown by this supply and demand curve?
0.004
0.2
0.5
5
To calculate the elasticity of demand, we use the formula:
Elasticity of demand = Percentage change in quantity demanded / Percentage change in price
Given that the price changes from $2.00 to $0.40, we can calculate the percentage change in price as follows:
Percentage change in price = ((New Price - Old Price) / Old Price) * 100
= (($0.40 - $2.00) / $2.00) * 100
= (- $1.60 / $2.00) * 100
= -80%
Now, let's assume that the quantity demanded changes from Q1 to Q2, but the actual values are not given. We know that the demand curve slopes downward, indicating a negative relationship between price and quantity demanded.
If we assume the quantity demanded decreases as the price decreases, we can say the percentage change in quantity demanded is negative. Let's assume the change in quantity demanded is -60%.
Then, using the formula for the elasticity of demand:
Elasticity of demand = (-60% / -80%)
= 0.75
Therefore, the correct answer is 0.75
Choose the statement that correctly describes elasticity of supply for firms over the short run or long run.
Over the short run, the elasticity of quantity supplied by firms tends to be more like the graph on the right.
Over the long run, the elasticity of quantity supplied by firms tends to be more like the graph on the left.
Over the short run, the elasticity of quantity supplied by firms tends to be more like the graph on the left.
Over the short run, the elasticity of quantity supplied by firms tends to be like both graphs.
Over the short run, the elasticity of quantity supplied by firms tends to be more like the graph on the left.
The highest degree of product differentiation is found in which of the following types of market structures?
monopolistic competition
perfect competition
oligopoly
monopoly