When price was 10, quantity demanded was 50. When price increased to 12, quantity demanded decreased to 40. Therefore, when price increased, total revenue
A. decreased from 500 to 480, indicating that demand is inelastic.
B. decreased from 500 to 480, indicating that demand is elastic.
C. increased from 480 to 500, indicating that demand is inelastic.
D. increased from 480 to 500, indicating that demand is elastic.
B. decreased from 500 to 480, indicating that demand is elastic.
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The coupon equivalent yield of a one-year Treasury bill with a $1,000 face value and a current price of $970 is __________ percent
A) 3.1 B) 3.0 C) 9.7 D) None of the above.
During a recession, the political incentive structure will encourage politicians to
a. undertake sound economic policies that are consistent with stability and growth. b. adopt any policies, even bad ones, that give the appearance of taking action. c. undertake policies that promote long-term economic growth rather than short-term benefits. d. do nothing and let the recession run its course.
Assume individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose current government spending increases and that individuals expect future government spending to increase. Given this information, we know with certainty that
A) current output and the current interest rate will both increase. B) current output will not change. C) future expected output will decrease. D) future expected output will not change.
The optimal taxation system is a tax system that
A. minimizes the overall excess burden. B. maximizes tax revenues. C. is highly progressive. D. minimizes the total tax burden.