When demand is unit elastic, a 7 percent change in the price of the good
A) will cause a change in quantity demanded of less than 7 percent.
B) will cause a change in quantity demanded equal to 7 percent.
C) will cause a change in quantity demanded greater than 7 percent.
D) will not cause any change in quantity demanded.
Answer: B
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If Callum is consuming his utility maximizing bundle and the price of one good rises, what happens to the marginal utility per dollar spent on this good (MU/P), and what should Callum do?
A) MU/P has increased and Callum should buy less of this good. B) MU/P has decreased and Callum should buy less of this good. C) MU/P has increased and Callum should buy more of this good. D) MU/P has decreased and Callum should buy more of this good.
How can the Fed increase the money supply? How can the Fed decrease the money supply? Be specific