Suppose the price of a bag of tortilla chips decreases from $3.00 to $2.50 and, as a result, the quantity of tortilla chips demanded increases from 200 bags to 300 bags. Using the midpoint method, the price elasticity of demand for tortilla chips in the given price range is

To reduce inflation, the federal reserve could

a) expand money supply in order to raise interest rates, which increases investment b) expand money supply in order to lower interest rates, which increases investment c) contract money supply in order to lower interest rates, which increases investment d) contract money supply in order to raise interest rates, which decreases investment e) buy bonds and increase discount rate to encourage borrowing

In the long run in perfectly competitive markets, individual firms will operate at very different output levels

a. True. b. False.