Which of the following supermarket strategies to increase sales would be most consistent with a neoclassical economics (versus behavioral economics) approach?
A. Holding posted prices constant but reducing package sizes.
B. Providing discounts for buying in bulk.
C. Placing the most frequently purchased items at the back of the store.
D. Positioning high-profit kids cereals on the lower shelves of the cereal aisle.
Answer: B
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If a product has very few substitutes, demand elasticity is likely to be
A) 1. B) elastic. C) infinitely elastic. D) inelastic.
A decrease in demand will:
a. reduce total revenue b. increase total revenue. c. increase total revenue only if demand is inelastic. d. increase total revenue only if demand is elastic.
When the Fed increases the discount rate, it is more likely that the economy experiences _________ and the increase in the rate will _____________
a. recession; increase the federal funds rate as well b. recession; increase the cost to banks of borrowing from the Fed c. recession; decrease the cost to banks of borrowing from the Fed d. inflation; decrease the cost to banks of borrowing from the Fed e. inflation; increase the cost to banks of borrowing from the Fed
Which of the following events can cause the labor-supply curve to shift?
a. an increase in the wage rate b. an increase in the price of output c. an increase in the rate of immigration d. a technological advance