The formula for price elasticity of demand that is used in practice
A. usually drops all minus signs.
B. usually takes on different values at different points on the demand curve.
C. may calculate the percentage change in price between P1 and P2 as “(P2 ? P1) as a percentage of (P1 + P2)/2.”
D. All of the responses are correct.
Answer: D
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In the United States, day-to-day decisions about monetary policy are carried out by
A) the Board of Governors. B) the Chairman of the Board of Governors. C) the Federal Open Market Committee. D) the Open Market desk in New York. E) none of the above
Which of the following is true of a price floor?
a. A price floor allows supply and demand to function effectively. b. A price floor is set such that the price is not allowed to increase above a certain level. c. A price floor is beneficial to buyers in a market. d. A price floor usually creates a shortage of a good in a market. e. A price floor is set such that the price is not allowed to decrease below a certain level.