A profit-maximizing monopoly will choose advertising expenditures so the ratio of advertising expenditures to total revenue is equal to the ratio of advertising elasticity to price elasticity (in absolute value)
Indicate whether the statement is true or false
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Which goods have more elastic demands?
A) goods with many substitutes B) goods which are necessities C) goods with few substitutes D) goods whose purchase represents a small percentage of income
The unemployment rate is
A) the percentage of the labor force that is unemployed. B) the percentage of the number employed that is unemployed. C) the percentage of the working-age population that is employed. D) the percentage of the working-age population that is unemployed. E) the percentage of the labor force that is employed.
If the economy is in a long-run equilibrium when the Federal Reserve decides that its inflation target is too low and chooses to raise it, ________
A) it would likely conduct a tightening of monetary policy by raising the real interest rate for any given inflation rate B) it would likely conduct an easing of monetary policy by lowering the real interest rate for any given inflation rate C) it would likely conduct an easing of monetary policy where the real interest rate would increase due to the ensuing decrease in aggregate demand D) it would likely conduct a tightening of monetary policy where the real interest rate would increase due to the ensuing increase in aggregate demand E) none of the above
A profit-maximizing monopsonist will hire workers up to the point at which
A) W = MRP. B) MRP = MFC. C) W = MFC. D) W = MRP = MFC.