New Zealand Scholarship Economics Practice Questions - New Zealand Scholarship Economics Assessment Exam

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If the price elasticity of demand (PED) for a agricultural export product is absolute value 0.4, a 10% increase in export price will result in which percentage change in quantity demanded?

A 4% decrease in quantity demanded A 40% decrease in quantity demanded A 2.5% decrease in quantity demanded A 10% decrease in quantity demanded

Correct Answer:

A 4% decrease in quantity demanded

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