The quantity of TVs sold is 100 at the unit price $200. Suppose the price elasticity of demand for TVs by the initial value method is 2.0, and you would like to decrease the unit price for TVs to $150. Then the new quantity sold must be:
A. 125.
B. 150.
C. 200.
D. 250.
Answer: B
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Refer to Table 25-1. Suppose a transaction changes a bank's balance sheet as indicated in the T-account, and the required reserve ratio is 10 percent. As a result of the transaction, the bank has excess reserves of
A) $0. B) $400. C) $3,600. D) $4,000. Table 25-2 Assets Liabilities Reserves +$8,000 Deposits + $8,000
A local government currently has a tax base of $4 billion and a tax rate of 5 percent. If the tax rate is increased to 6 percent, the tax base will decrease to $3.5 billion. If the goal is to maximize tax revenues the tax rate should be
A) lowered below 5 percent. B) kept at 5 percent. C) raised to 6 percent. D) abolished.
If a monopolistically competitive firm's demand curve is shifting left, it will stop shifting when:
A. firms are positive but not large economic profit. B. the firm is earning negative economic profit. C. the firm is earning zero economic profit. D. price falls to marginal cost.
Government outlays
What will be an ideal response?