Author Question: The price elasticity of demand coefficient for gourmet coffee is estimated to be equal to 1.6 . It ... (Read 126 times)

Yi-Chen · **on:** Jun 30, 2018

The price elasticity of demand coefficient for gourmet coffee is estimated to be equal to 1.6 . It is expected, therefore, that a 10 increase in price would lead to:
a. a 16 decrease in the quantity of gourmet coffee demanded.
b. a 16 increase in the quantity of gourmet coffee demanded.
c. an 8 decrease in the quantity of gourmet coffee demanded.
d. an 8 increase in the quantity of gourmet coffee demanded.

Question 2

If a bank receiving a new deposit of 200,000 would be able, as a result, to increase their lending by at most 150,000, then the required reserve ratio equals:
a. 4.
b. 25.
c. 40.
d. 50.