When the price of tea decreases 7%, quantity demanded increases 12%. The price elasticity of demand for tea is ________ and total revenue from tea sales will ________.
A. inelastic; decrease
B. inelastic; increase
C. elastic; decrease
D. elastic; increase
Answer: D
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A bond with no expiration has an original price of $10,000 and a fixed annual interest payment of $1,000. If the price of this bond increases by $2,500, the interest rate in effect will
A. decrease by 1 percentage point. B. increase by 1 percentage point. C. increase by 2 percentage points. D. decrease by 2 percentage points.
The Laffer curve is a curve showing
A) output as a function of the tax rate. B) tax revenue as a function of the tax rate. C) government expenses as a function of how liberal the government is. D) the tax rate as a function of government expenses.
An increase in consumers' incomes raises the equilibrium price and quantity of fine clothing
Indicate whether the statement is true or false
Which one of the following statements best describes the results of the Clean Air Act in the United States?
a. It has been successful at reducing levels of both criteria and toxic pollutants b. It has been unsuccessful at reducing levels of both criteria and toxic pollutants c. It has been successful in reducing levels of criteria pollutants, but levels of toxic pollutants have increased d. It has been successful in reducing levels of toxic pollutants, but levels of criteria pollutants have increased e. It is too early to judge whether the Clean Air Act has reduced pollution levels