You are part of a local community theater group. Its goal is to raise as much revenue as possible. Mary suggests raising ticket prices. Is she right?
a. yes if the demand for tickets is price inelastic
b. no if the demand for tickets is price inelastic
c. yes because raising prices always increases revenue
d. no because raising prices reduces sales and revenue
e. most likely because the demand curve for theater tickets is typically inelastic
A
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What is one significant characteristic of fractional reserve banking?
A. Bank loans will be equal to the amount of gold on deposit. B. Banks hold a fraction of their loans in reserve. C. Banks can create money through lending their reserves. D. Banks use deposit insurance for loans to customers.
When the government deliberately alters its level of spending and/or taxes in order to achieve specific national economic goals, it is exercising
A) a laissez-faire policy. B) discretionary fiscal policy. C) monetary policy. D) a Ricardian policy.
A fall in the real interest rate
A) results in a movement along the demand for loanable funds curve. B) shifts the demand for loanable funds curve rightward. C) shifts the demand for loanable funds curve leftward. D) has no effect on the demand for loanable funds curve
Suppose that demand is perfectly inelastic. Supply is normal and upward sloping. What is the economic incidence of a unit tax placed on suppliers? Illustrate this with an appropriate diagram.
What will be an ideal response?