A recent study at a liberal arts college concluded that demand ...

[swpotter12]

A recent study at a liberal arts college concluded that demand elasticity is 0.91 for college courses. The administration is considering a tuition increase to help balance the budget. An economist might advise the school to:
 a. decrease tuition in order to increase revenue by boosting enrollment.
 b. increase tuition in order to increase revenue.
 c. leave tuition unchanged as a change in tuition is unlikely to enhance the school's budget by increasing revenue.
  d. decrease tuition because demand for courses is elastic.

Question 2

If a bank gets a 100,000 new deposit, chooses to lend out 75,000, and increases its excess reserves by 5,000 at the same time, then the reserve requirement is:
 a. 30.
 b. 25.
 c. 20.
 d. unable to be determined from the information given.

[katara]

Answer to Question 1

b

Answer to Question 2

c

[swpotter12]

Gracias!

[juliaf]

Thanks for the timely response, appreciate it