1.If the price elasticity of demand for a good is3, then a20percent increase in price results in a

a. 15percent decrease in the quantity demanded.

b. 3percent decrease in the quantity demanded.

c. 60percent decrease in the quantity demanded.

d. 20percent increase in the quantity demanded.

2.A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

a. reduce efficiency.

b. enhance equality.

c. reduce the reward for working hard.

d. All are correct.