Question 1

If the average cost of producing one widget decreases from $12.50 to $10.75, what is the percent of the decrease?

(A)  10
(B)  12.5
(C)  14
(D)  15
(E)  16

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The correct response is (C). The amount of the decrease is $1.75. The percent of the decrease is $1.75 ÷ $12.50 (average price before the decrease). The key to quickly determining the quotient is to recognize that $12.50 is exactly one-eighth of 100. Thus, you can simply multiply $1.75 by 8 to determine the solution: ($1.75)(8) = 14.