Refer to the above table. Suppose the price of A increases from $10 to $12. What is the cross price elasticity of demand between A and C?
A. +7.06
B. -7.06
C. -0.292
D. +0.292
Answer: D
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If demand is perfectly elastic, a sales tax is paid by
A) only the buyers. B) only the sellers. C) both the buyers and sellers. D) None of the above answers is correct.
Regarding demand elasticity, which of the following statements is correct?
A. If demand for seller’s product is elastic, a price increase will decrease total revenue. B. If demand for seller’s product is elastic, a price increase will increase total revenue. C. If demand is exactly unit elastic, an increase in price will raise total revenue. D. If demand is exactly unit elastic, an increase in price will raise total revenue.
If a non-discriminating monopolist decides to lower its price to sell one more unit of its product, then
a. total revenue rises by an amount equal to the price b. some revenue is lost to the extent that units previously sold at a higher price now sell for a lower price; however, the additional unit sold brings in new revenue c. marginal revenue increases when total revenue increases d. the net effect on total revenue is typically zero since the price must fall e. the net effect on total revenue is typically negative since the price must fall
When the Federal Reserve System was first established, its founders intended the Fed to
A. assist the Treasury in collecting taxes. B. be primarily responsible for government regulations. C. pursue an active monetary policy to stabilize the economy. D. provide protection against financial panics by acting as the lender of last resort.