Julia knows the price elasticity of movie rentals is 3 . She knows, therefore, that if she raises her price from $2 to $2.50, her rentals will drop by approximately
a. 150 percent.
b. 100 percent.
c. 75 percent.
d. 33 percent.
c
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You lend $5,000 to a friend for one year at a nominal interest rate of 10%. The CPI over that year rises from 180 to 190. What is the real rate of interest you will earn?
A) 0% B) 4.4% C) 5.5% D) 5.8%
Banks require collateral for loans in order to
A) ensure that borrowers have significant amounts of their own funds invested in their businesses. B) charge higher interest rates on loans. C) reduce their tax liability on the interest they collect on loans. D) reduce the total amount they are obliged to lend to any one borrower.
The market for used cars is shown in the above figure. Buyers cannot tell whether any given car is a lemon. For all cars offered for sale to be sold, the percent of all cars that are lemons is ?
What happens to ? if car buyers incur a $100 transaction cost when buying a used car?
When interest rates rise, bond prices:
A. rise. B. could either rise or fall. C. fall. D. do not change.