Which of the following describes a situation in which demand must be inelastic?
a. The price of pens rises by 10 cents, and quantity of pens demanded falls by 50.
b. The price of pens rises by 10 cents, and total revenue rises.
c. A 20 percent increase in the price of pens leads to a 20 percent decrease in the quantity of pens demanded.
d. Total revenue does not change when the price of pens rises.
e. Total revenue decreases when the price of pens rises.
B
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Based on the above table, the reserve ratio for the banking system is
A) 1 percent. B) 15 percent. C) 20 percent. D) 10 percent.
Increases in the minimum wage are intended to raise the incomes of low-income workers. Many economists favor a different policy to achieve this goal, a policy that avoids the deadweight losses that result from the minimum wage
What is this policy? A) distribution of vouchers that can be used for rent or mortgage payments B) the earned income tax credit C) the Alternative Minimum Tax D) distribution of food stamps to low-income consumers
The demand curve a monopolist faces
a. is more elastic than a perfectly competitive firm's demand curve b. is the market demand curve c. is as elastic as a perfectly competitive firm's demand curve d. is not affected by the prices of complements e. will not shift in response to a change in consumer tastes
The decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income is called the:
A. income effect. B. price effect. C. substitution effect. D. labor effect.