What is the correct interpretation of elasticty value of 0.5 for Y with respect to X? Select one: a. If X increases by 1 unit, Y increases by 0.5 unit. b. If X increases by 1%, Y increases by 0.5%. c. If Y increases by 1 %, X increases by 0.5 %. d. If Y increases by 1 unit, X increases by 0.5 unit.
What is the correct interpretation of elasticty value of 0.5 for Y with respect to X? Select one: a. If X increases by 1 unit, Y increases by 0.5 unit. b. If X increases by 1%, Y increases by 0.5%. c. If Y increases by 1 %, X increases by 0.5 %. d. If Y increases by 1 unit, X increases by 0.5 unit.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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q3-
What is the correct interpretation of elasticty value of 0.5 for Y with respect to X?
Select one:
a.
If X increases by 1 unit, Y increases by 0.5 unit.
b.
If X increases by 1%, Y increases by 0.5%.
c.
If Y increases by 1 %, X increases by 0.5 %.
d.
If Y increases by 1 unit, X increases by 0.5 unit.
Expert Solution
Step 1
Elasticity measures the responsiveness of a dependent variable with respect to a change in another independent variable.
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