Refer to the data below. Over which price range is the demand inelastic?
A. $20-$18
B. $18-$16
C. $14-$12
D. $8-$6
D. $8-$6
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When the Fed wants to lower the federal funds rate, it ________.
A. increases the reserve requirement B. increases the prime rate C. buys bonds from banks and the public D. increases the discount rate
An example of a natural monopoly is
A) a house. B) the Internet. C) air traffic control. D) fish in the ocean.
Grace Makutsi finally bought a pair of blue shoes that she had been coveting for a long time. In less than a week she discovered that the shoes were uncomfortable. Grace went back to wearing her old pair and stashed away the new pair
When asked by her boss, Mme. Ramotswe, why does she not simply give away the new pair, she said: "But I paid so much for them." Grace's behavior A) supports the endowment effect which states that ownership of an item makes it more valuable. B) is rational because the more you pay for an item the more valuable it is. C) ignores the fact that the purchase price is now a sunk cost and has no bearing on whether she should give them away or not. D) is rational: she should not discard a valuable item.
Suppose that a monopolist must choose between two points on its demand curve: it can sell 100 units for $3 each, or it can sell 150 units for $2 each. Which of the following is true?
a. The monopolist is facing elastic demand. b. The monopolist is facing unit elastic demand. c. The monopolist is facing inelastic demand. d. The monopolist is facing perfectly elastic demand. e. The elasticity of demand cannot be determined with the information given.