If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is
A) elastic and total revenue decreases.
B) elastic and total revenue increases.
C) inelastic and total revenue decreases.
D) elastic, but we cannot tell what happens to total revenue without more information.
E) Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information.
A
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It would have been very difficult to clean up Lake Erie some years ago without government participation primarily because
A) environmental improvements benefit everyone and should therefore be financed from taxes. B) the lake is a navigable body of water. C) the lake is officially public property. D) the pursuit of profit will cause environmental deterioration. E) too many people could benefit without helping to pay the cost of the cleanup.
Nick considers macaroni and cheese to be an inferior good. As a result of macaroni and cheese being an inferior good, the
A) substitution effect must be larger in magnitude than the income effect so that less is purchased as the price falls. B) substitution effect must be smaller in magnitude than the income effect so that less is purchased as the price falls. C) income effect is positive, so that more is purchased as income increases. D) income effect is negative, so that less is purchased as income increases.
Managers can increase firm profits by:
A) increasing revenue only. B) decreasing costs only. C) increasing revenue and decreasing costs. D) none of the above.
Most modern financial centers use computers to match buyers and sellers. This absence of personal contact contradicts the definition of a market
Indicate whether the statement is true or false