The quantity of TVs sold is 100 at the unit price $200. Suppose the price elasticity of demand for TVs by the initial value method is 2.0, and you would like to decrease the unit price for TVs to $150. Then the new quantity sold must be:
A. 125.
B. 150.
C. 200.
D. 250.
Answer: B
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Which of the following increases the supply of a good?
A) Prices of inputs used to produce the good rise. B) Productivity improves. C) Producers expect higher prices for the good in the future. D) There is a decrease in the price of a complement in production. E) The number of producers decreases.
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 8 percent, then the bank can make a maximum loan of
A) $0. B) $2 million. C) $8 million. D) $10 million.
Assuming capital and labor are substitutes, an improvement in technology that affects only the productivity of capital would cause a firm to employ more capital but leave the amount of labor employed unchanged
Indicate whether the statement is true or false
An information is beneficial to the decision-maker only when:
a. its marginal cost is zero. b. its marginal benefits exceeds its marginal cost. c. the possibility of inaccurate transmission is nullified. d. its marginal benefit is positive.