Author Question: A recent study at a liberal arts college concluded that demand elasticity is 0.91 for college ... (Read 75 times)

swpotter12 · **on:** Jun 30, 2018

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.