Related to the Economics in Practice on page 102: Harriet runs a corner delicatessen and one day decides to raise her prices by 20 percent. Total revenue is likely to ________ when she first raises prices since demand is relatively ________ in the short term.
A. rise; inelastic
B. rise; elastic
C. fall; elastic
D. fall; inelastic
Answer: A
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The Taylor rule says that the fed funds rate target is a function of all of the following, except
A) the actual inflation rate. B) the target inflation rate. C) the percentage difference between actual and potential real GDP. D) the level of borrowed reserves.
The Dodd-Frank Act removed which group from decisions regarding the presidents of Federal Reserve Banks?
A) Class A directors B) Class B directors C) Class C directors D) Board of Governors
In a very basic principal-agent model, output is contractible if:
A. the employee works independently and cannot game the performance measure. B. the employee works in a team C. it can be observed with some positive cost. D. the employee produces many products.
A production possibilities curve indicates the
A. Combinations of goods and services an economy is actually producing. B. Maximum combinations of goods and services an economy can produce given its available resources and technology. C. Average combinations of goods and services an economy can produce given its available resources and technology. D. Maximum combinations of goods and services an economy can produce given unlimited resources.