Rebel Records announces it is cutting the prices of its bluegrass album titles by 25 percent. If Rebel is seeking to increase revenues, it must believe that the elasticity of demand for bluegrass albums is
a. elastic.
b. inelastic.
c. of unitary elasticity.
d. perfectly inelastic.
A
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The Federal Reserve cut the federal funds rate seven times between September 2007 and March 2008. What event led the Fed to make these reductions in the federal funds rate?
A) The chairman of the Federal Reserve System persuaded members of the Federal Open Market Committee to lower interest rates in order to reduce the price of oil in international markets. B) It was in response to reductions in the discount rate, which was also lowered seven times over the same time period. C) Several large investment banks failed during this time period. D) During this period there was a substantial reduction in the demand for housing.
The vertical distance between the average total cost and the average variable cost curves at any level of output will always be
A. variable cost. B. fixed cost less variable cost. C. average fixed cost. D. total cost less fixed cost.
"Tax cuts, by providing incentives to work, save, and invest, will raise employment and lower the price level." This argument is made by the:
A. Keynesian economists. B. supply-side economists. C. classical economists. D. monetarists.
Select the graph below that best shows the change in the market specified in the following situation: In the market for leather coats, when leather coats become more fashionable among young consumers
Assume that the graphs show a competitive market for the product stated in the question.
A. Graph A
B. Graph B
C. Graph C
D. Graph D