The demand for movies is unit elastic if
A) a 5 percent decrease in the price leads to an infinite increase in the quantity demanded.
B) a 5 percent increase in the price leads to a 5 percent decrease in the quantity demanded.
C) any increase in the price leads to a 1 percent decrease in the quantity demanded.
D) a 5 percent increase in the price leads to a 5 percent increase in total revenue.
B
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In economics we learn that
A) tradeoffs allow us to have more of everything we value. B) tradeoffs allow us to avoid the problem of opportunity cost. C) opportunity costs are all of the possible alternatives given up when we make a choice. D) None of the above answers is correct.
We would expect which of the following to occur when the central bank pursues expansionary monetary policy?
A) an increase in bond prices and an increase in the interest rate (i) B) a reduction in bond prices and an increase in i C) an increase in bond prices and a reduction in i D) a reduction in bond prices and a reduction in i E) none of the above