If the demand is ________, a fall in price ________ total revenue
A) elastic; increases
B) elastic; decreases
C) inelastic; increases
D) inelastic; does not change
A
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Suppose that the CPI basket contains only 40 heads of cauliflower and 60 bunches of broccoli. If the price of cauliflower goes down by $1 per head and the price of broccoli goes up by $1 per bunch, then
A) the CPI decreases. B) the CPI does not change. C) the CPI increases. D) the CPI might increase or decrease depending how the quantities are affected by the price changes. E) There is not enough information to answer this question.
Refer to Figure 4-5. With rent control, the quantity supplied is Q1. Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get. What is the highest rent they can get?
A) R1 B) R0 C) more than R1 D) R*