If the price elasticity of demand was 4.0 (in absolute terms), a 10% off sale would lead to:
a. a 40% increase in purchases by customers.
b. a 40% decrease in purchases by customers.
c. a 2.5% increase in purchases by customers.
d. a 2.5% decrease in purchases by customers.
a
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Suppose Arf n' Barf restaurant has a monopoly on restaurant food in a certain small town. Their rent, which is one of several fixed costs they pay whether they sell food or not, has gone up. In the short run, the Arf n' Barf should
a. pay the higher rent and increase menu prices b. pay the higher rent and leave menu prices unchanged c. pay the higher rent and lower prices d. go out of business e. shut down
Answer the following statements true (T) or false (F)
1. The value of money in the United States is based on the stock of gold and silver held by the United States government. 2. The Federal Reserve System is independent of Congress and the President, and does not have to follow orders from either Congress or the President. 3. The Federal Open Market Committee (FOMC) regulates markets and enforces antitrust laws to keep markets open and competitive. 4. The Federal Reserve System is the institution that issues the U.S. paper currency or dollar bills. 5. The general public can open deposit accounts at their district's Federal Reserve Bank.