Suppose the absolute price elasticity of demand for magazine subscriptions is 1.5. In order to increase the total revenues from subscriptions, the publishers should
A) increase the price of the newsletters.
B) reduce the price of the newsletters.
C) sell the newsletters on the inelastic portion of its demand curve.
D) keep the price the same.
Answer: B
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If identical firms sell an undifferentiated product, advertising is likely to be
A) used to attack the rivals' products. B) collectively undertaken by the industry group. C) strategically aimed at deterring entry. D) focused on secret ingredients.
Which of the following is held constant when constructing a production possibilities curve?
A) the price level B) the income level C) combination of goods produced D) the amount of total resources used
Increased opportunities for trade increase production by
A. Protecting countries from competition. B. Improving efficiency through specialization. C. Encouraging countries to be self-sufficient. D. Shifting the production possibilities curve outward.
Which of the following groups of people would most likely pay a higher percentage of their wages on excise tax?
a. doctors earning $400,000 per year b. engineers earning $95,000 per year c. teachers earning $55,000 per year d. cashiers earning $25,000 per year