Using the general concept of elasticity, would you expect the elasticity of demand for advertising to be positive or negative? Explain
Firms would advertise only if they believe it would increase sales. However, with regard to the cost or price of advertising, a firm would purchase a greater amount of advertising at a lower price per advertisement, As such, we would expect the elasticity of demand for advertising to be negative with regard to price.
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Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Mike should specialize in producing
A. cars. B. neither cheese nor cars. C. both cheese and cars. D. cheese.
Assume that the price elasticity of demand for movie theatres is -.85 during all evening shows but for all afternoon shows the price elasticity of demand is -2.28 . For the theatre to maximize total revenue, it should
a. Charge the same price for both shows, holding other things constant. b. Charge a higher price for the afternoon shows and lower price for the evening shows, holding other things constant c. Charge a lower price for the afternoon shows and higher price for the evening shows, holding other things constant d. Need more information
Suppose a person defects from Cuba (a country that generally disregards the use of markets) to the United States and asks to see a market in action. Where would you take her? Did you give her a complete showing of this market?
If the production of oranges reduces global warming, then the equilibrium quantity of oranges will be ________ the socially optimal quantity.
A. lower than B. equal to C. more valuable than D. higher than