If the price of a product is lowered from $300 to $270, and as a result the quantity demanded increases from 25 to 30 units, we know that in that range:
a. demand has declined
b. demand is elastic.
c. demand is unit elastic.
d. demand is inelastic.
e. demand is perfectly elastic.
b
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An increase in price could occur due to a(n)
a. Increase in demand and no change in supply b. Decrease in supply and no change in demand c. An increase in demand and decrease in supply d. All of the above
Extensive advertising will always lead to an increase in average total cost for the firm
a. True b. False Indicate whether the statement is true or false
If investment spending is relatively insensitive to changes in the interest rate, then the most effective expansionary policy would be
a. a reduction in required reserves. b. Fed purchases of government securities. c. a personal income tax increase. d. a personal income tax cut.
Since 1995, federal regulations have
a. tightened mortgage lending standards and therefore made it difficult to obtain a loan to purchase a house. b. increased the down payment housing buyers are required to make in order to obtain a mortgage loan. c. loosened lending standards and made it possible for many buyers to purchase a house with little or no down payment. d. required investment banks to maintain more capital against their holdings of mortgage loans.