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What is the different between price effect and sales effect?
Both relate to Elasticity and Total Revenue:
a. A price effect: After a price raise, all unit sold sells at a higher price that tends to increase revenue.
b. A sales effect: After a price raise, fewer units are sold that tends to lower revenue.
#If the reserve bank wants to pursue a contractionary monetary policy, the bank should?
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If the indifference curves are straight lines with slope s, and the budget constraint is given by: x*p1+y*p2 = m, then describe the optimal choice of the consumer.
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