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G This gives her the advantage c x ructure.com/courses/26817/quizzes/120463/take Question 45 1 pts Celine runs a sporting goods store and knows that the price elasticity of demand for her sports clothing line is -1.5. She is planning to lower prices by 10 percent. The percentage change in quantity demanded will be O 15 percent 0.15 percent. 666 percent. 0.06 percent. 8.50 percent. Question 46 1 pts To determine which of two producers has a comparative advantage, one would need to know their O increasing relative costs. O opportunity costs of production for both goods O normative beliefs. O zero-sum games. O levels of investment.Explanation / Answer
45
The price elasticity demand of the clothing = % change in the quantity demanded / %change in the price
-1.5 =% change in the quantity demanded /-10%
% change in the quantity demand =-1.5*(-10)
=15%
It means with the decrease in the price, the quantity demand will increase by 15%.
Hence option first 15% is the correct answer.
46.
Opportunity cost can be defined as the production of output which is given up for producing some additional units of another output.
It is said that a person has a comparative advantage in the production of something if he can produce it at lower opportunity cost compare to someone else.
It means one needs to know the opportunity cost of the goods of both producer and the producer who has a lower opportunity cost of producing any goods, that producer has a comparative advantage and he will produce that product.
Hence option second is the correct answer.
Option second; Opportunity cost of the production of both the goods.
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