Summarize the relationship between elasticity, price changes, and changes in total revenue
What will be an ideal response?
When demand is inelastic, total revenue moves in the same direction as price, and in the opposite direction of quantity demanded. When demand is elastic, total revenue moves in the opposite direction of price, and the same direction as quantity demanded. When demand is unit elastic, a price change has no effect on total revenue.
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From the end of the Civil War to the start of World War I, the direction of U.S. trade
(a) stayed the same. (b) was dominated by trade with Europe. (c) grew and broadened to include other countries in Asia and the Americas. (d) dwindled.
Using the multiplier effect, if the government increases purchases on transportation equipment by $5 billion, which of the following is the most likely change in total purchases?
a. an increase of $5 billion b. an increase of $15 billion c. a decrease of $5 billion d. a decrease of $15 billion
If firms expect prices to be higher in the future and the product is not perishable, then
A. the current supply curve shifts to the left. B. producers produce more output to hold back for the future. C. the current supply curve shifts to the right. D. none of the statements associated with this question are correct.
If a consol is offering an annual coupon of $50 and the annual interest rate is 6%, the price of the consol is:
A. $8333.33 B. $47.17 C. $833.33 D. $813.00