According to the graph, when price falls from point $40 to $30 we know that demand must be
a. elastic, since total revenue increases from $8000 to $9000.
b. inelastic, since total revenue increases from $8000 to $9000.
c. inelastic, since total revenue decreases from $9000 to $8000.
d. unit elastic, since total revenue decreases from $9000 to $8000.
Ans: a. elastic, since total revenue increases from $8000 to $9000.
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What will be an ideal response?
Raising taxes and cutting spending are examples of ________
A) fiscal policy tightening B) fiscal policy expansion C) monetary policy tightening D) monetary policy expansion E) none of the above
Government attempts to lower, raise, or simply stabilize prices can:
A. shift the distribution of surplus. B. create unintended side effects. C. reduce efficiency of a market. D. All of these are true.
Which of the following is a reason to think that government action may not be valuable to improve market outcomes with asymmetric information?
a. The private market can sometimes deal with information asymmetries using signaling and screening. b. The government rarely has more information than the private parties. c. Government actions have their own imperfections. d. All of the above are correct.