Refer to the graph above and assume that the areas of the boxes are the same. Consider a situation where price increases from P3 to P4. In this price range, demand is relatively:
A. inelastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A).
B. elastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G).
C. elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A).
D. inelastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G).
Answer: C
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The rate of interest banks charge each other for lending reserves is the:
A. Federal funds rate. B. Discount rate. C. Money multiplier. D. Excess reserve rate.
Refer to the above table. Suppose the price of a movie is $5 and the income of the consumer is $29. What are the quantities demanded of hamburger at prices of $2 and $1 respectively?
A. 0; 1 B. 1; 2 C. 3; 5 D. 2; 4
The labor market in professional baseball is an example of
A. a monopsonistic labor market. B. a monopolistic labor market. C. a bilateral monopoly. D. a perfectly competitive labor market.
An example of a market failure is when:
A. a firm selling a product faces competition from many other sellers. B. a good is priced too high for poor families to afford. C. the distribution of surplus is unfair. D. one person's consumption of a good imposes costs on others