The All Smiles Greeting Card Company wants to increase the quantity of greeting cards it sells by 20%. If the price elasticity of demand is -5.0, the company must
A. increase price by 0.25%.
B. decrease price by 0.25%.
C. decrease price by 4.0%.
D. increase price by 4.0%.
Answer: C
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If only a small volume of trading can be absorbed without producing wide price swings, a market is
A) liquid. B) thin. C) broad. D) resilient.
A reduction in the required reserve ratio has the instant effect of:
a. Increasing excess reserves. b. Increasing bank shareholders' equity. c. Increasing bank reserves. d. All of the above are correct. e. None of the above is correct.
People who often create benefits for the minority and impose the cost on the majority are called:
a. laissez-faire groups. b. fair-interest groups. c. special-interest groups. d. encounter groups.
Suppose two people with the same level of income and wealth have different discount rates. Joe has a very high discount rate and Jim has a very low discount rate. Which one of the following is TRUE?
A) Joe is more likely to borrow than Jim. B) Joe is less likely to borrow than Jim. C) Joe and Jim will borrow the same amount. D) Neither Joe nor Jim would be borrowers.