Consider the D0 and D1 demand curves in the diagram below. Defining the price elasticity of demand as a positive number, which of the statements below is correct?

(A) At point A, the price elasticity of D0 is larger than the price elasticity of D1; along D0, the price elasticity of demand in point A is equal to the price elasticity of demand in point B.

(B) At point A, the price elasticity of D0 is smaller than the price elasticity of D1; along D0, the price elasticity of demand in point A is equal to the price elasticity of demand in point B.

(C) At point A, the price elasticity of D0 is equal to the price elasticity of D1; along D0, the price elasticity of demand at point A is equal to the price elasticity of demand at point B.

(D) At point A, the price elasticity of D0 is smaller than the price elasticity of D1; along D0, the price elasticity of demand at point A is larger than the price elasticity of demand at point B.

(E) At point A, the price elasticity of D0 is larger than the price elasticity of D1; along D0, the price elasticity of demand at point A is larger than the price elasticity of demand at point B.

Cengage Aplia: Student 4.5 New Equilibrium INTEREST RATE (Percent) 4.0 35 3. 20 0.6 0.7 08 09 1.0 1.1 1.2 1.3 QUANTITY OF MONEY (Trillions of dollars) Suppose the Federal Reserve (the Fed) announces that it is lowering its target Interest rate by 50 basis points, or 0.50%. It would achieve this by the . Use the green line (triangle symbols) on the preceding graph to illustrate the effects of this policy. P the black point (plus symbol) on the graph to indicate the new equilibrium interest rate and quantity of money. must raise the interest they pay to The sequence of events that res ed makes the change you selected, may be described as follows: can issue bonds at lower interest rates and still Because there is * money in ring financial assets (such as bonds) demanded which means that bond issuers sell bonds. This process continues until the new equilibrium interest rate is achieved. Grade It Now Save & Continue Continue without savingHelp Center ? Question 1 6 pts (If eyeballing quantities to match up with price is worrying you just tell me which ones you're looking at so I know that you still understood the question) 1. If the market equilibrium price is $120, how much is total consumer surplus? (1 point) 2. If the market equilibrium price falls from $120 to $80, how much is the change in total consumer surplus in the market? (1 point) 3.If the market equilibrium price falls from $120 to $80, how much is the increase in consumer surplus to the consumers who were initially in the market at the $120 price? (2 points] 4.If the market equilibrium price falls from $120 to $80, how much consumer surplus do consumers entering the market after the price drop receive? (2 points) MacBook ProQUESTION 19 When resources are perfectly shiftable between the production of two goods, the PPF is a straight line going downwards and it reflects - Ca. Depends on the situation Ob. Constant Opportunity Cost Oe Increasing Opportunity Cost Od. Decreasing Opportunity Cost QUESTION 20 When people benefit from public goods and services but do not pay for that, it is called a. Monopoly Ob. Negative Externality c. Free Rider Problem Od. Moral HazardQuestions 2 and 3 For both questions below, assume that all dollar amounts have already been corrected for inflation. Thus, any change in value of money over time is due only to interest (opportunity cost). Question 2. Find the annual amount equivalent to the following cash flow. Assume 5% discount rate. -$50M +$1M per yr for 10 yrs + $10M 11 20 50 yrsQuestion 6 If the price of a gadget is currently below the equilibrium price, there is a surplus and the price will fall to restore market equilibrium. there is a shortage and the price will rise to restore market equilibrium there is a shortage and the price will fall to restore market equilibrium. there is a surplus and the price will rise to restore market equilibrium. Question 7 In years with inflation, nominal GDP increases real GDP O at the same rate as sometimes faster, sometimes slower, and sometimes at the same rate as O slower than O faster than