Author Question: Butch's Barber Shop knows that it faces an elasticity of demand equal to 3.0 over the relevant range ... (Read 50 times)

jasdeep_brar · **on:** Jun 30, 2018

Butch's Barber Shop knows that it faces an elasticity of demand equal to 3.0 over the relevant range of its demand curve. A 1 increase in its price will do what to the number of haircuts demanded from Butch's Barber Shop?
a. It will increase by 0.33
b. It will increase by 3.0
c. It will decrease by 0.33
d. It will decrease by 3.0

Question 2

Which of the following is the Fed's most common way to change the money supply?
a. Moral suasion
b. The discount rate
c. The required reserve rate
d. Open market operations