A Decrease in Tuition Fees Decreases the University's Total Revenue

question 124

Multiple Choice

A decrease in tuition fees decreases the university's total revenue if the price elasticity of demand for university education is

• A)negative.
• B)greater than zero but less than 1.
• C)equal to 1.
• D)greater than 1.
• E)less than the elasticity of supply.

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Definitions:

Government Expenditures

Spending by the government on goods, services, and obligations, including salaries, infrastructure projects, and social benefits.

Price Level

Price level refers to the average of current prices across the entire spectrum of goods and services produced in the economy, a measure of inflation or deflation.

Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a period of time, typically a year.

Consumer Confidence

Consumer confidence is a measure of how optimistic or pessimistic consumers are about their expected financial situation and the overall state of the economy.