If a sandwich shop near campus increases its prices by 5 percent, but revenues from its sales are unchanged, the price elasticity of demand for the services offered by the sandwich shop must be
a. elastic.
b. of unitary elasticity.
c. inelastic.
d. equal to 0.5.
B
You might also like to view...
Assuming each policy is performed with the same magnitude, which of the following would be the most restrictive monetary policy action on the part of the Federal Reserve?
a. Sell government securities, raise reserve requirements, and lower the discount rate b. Buy government securities, raise reserve requirements, and raise the discount rate c. Sell government securities, lower reserve requirements, and raise the discount rate d. Sell government securities, raise reserve requirements, and raise the discount rate
Members of the Federal Reserve Board of Governors serve one nonrenewable term of:
a. 4 years. b. 7 years. c. 14 years. d. life.
A departure from the New Zealand model, in which the central bank implements an inflation target set by the government, the ECB operates according to the German model, in which the central bank:
A) has ceded power to the administration. B) has authority to set and implement the inflation target. C) functions only in a technical sense. D) is replaced by a currency board.
Suppose you observe that as a TV manufacturer increases its price its total revenue decreases. This could be due to:
A. demand being price inelastic. B. demand being price elastic. C. demand being unit elastic. D. demand being perfectly price inelastic.