The price elasticity of demand coefficient for gourmet coffee is ...

[Yi-Chen]

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.

[pangili4]

Answer to Question 1

a

Answer to Question 2

b

[Yi-Chen]

Excellent

[ktidd]

TYSM