Which of the following examples shows the most inelastic demand?
a. When the price of printers increases from $800 to $1,000 per printer, sales decreases by 20 percent.
b. When the price of fedoras increases from $90 to $100 per hat, sales decreases by half.
c. When the price of shoes decreases from $60 to $50 per pair, sales increases 5 percent.
d. When the price of crackers decreases from $3 to $2 per box, sales double.
c. When the price of shoes decreases from $60 to $50 per pair, sales increases 5 percent.
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When negative externalities are involved, the market is said to
A. fail, because it underproduces the good connected with the negative externality. B. fail, because it overproduces the good connected with the negative externality. C. succeed, because it produces the socially optimal quantity of the good connected with the negative externality. D. be "in optimum," because the equilibrium fully adjusts for the negative externality.
A monopsonist firm faces a negatively sloped marginal factor cost curve
a. True b. False Indicate whether the statement is true or false
During a drought, the price elasticity of demand for water is less than one. During a flood, the price elasticity of demand for water is greater than one. This means that the:
a. demand for water is elastic during a drought and inelastic during a flood. b. demand for water is inelastic during a drought and elastic during a flood. c. demand curve for water cannot have a constant slope. d. quantity of water people choose to consume is independent of the price
Explain how a change in the interest rate on reserves affects the money supply.
What will be an ideal response?