Suppose that the percentage change in supply is 50%, the price elasticity of demand is 4, and the price elasticity of supply is 1. The equilibrium price will:
A. decrease by 10 percent.
B. increase by 55 percent.
C. increase by 10 percent.
D. decrease by 55 percent.
Answer: A
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Use the following graph to answer the next question.
If the equilibrium interest rate is 4%, the supply of money must be
A. $100 billion. B. $150 billion. C. $200 billion. D. $250 billion.
Suppose you are considering buying stock in the stock market, and your objective is to maximize your net worth. Furthermore, your study of the market reveals that the economy will be slowing down over the next several months
Under these conditions, it would be best to purchase stock in companies that produce A) normal goods. B) luxury goods. C) price elastic goods. D) inferior goods.
Typically in countries with lower levels of real GDP person, a smaller percentage of the population is literate
a. True b. False Indicate whether the statement is true or false
Suppose that an Italian ice cream firm is facing a linear demand curve and that the current price for the Italian ice cream is set at a point where the price elasticity is 1.7. If the firm decreases the product price, the total revenue will:
A. increase if at the new price, the elasticity is still greater than 1. B. increase if at the new price, the elasticity is lower than 1. C. decrease regardless of the size of the price decrease. D. increase regardless of the size of the price decrease.