The Sandy Deli operates near a college campus. It has been selling 325 sandwiches a day at $1.75 each and is considering a price cut. It estimates 450 sandwiches would sell per day at $1.50 each. Calculate the marginal revenue of such a price cut and the elasticity between the two points.
What will be an ideal response?
Revenue is currently 325 × $1.75 = $568.75. Revenue at the new price is 450 × $1.50 = $675. The marginal revenue is $675 ? $568.75 = $106.25. Elasticity is (% DQ) / (% DP) = [125 / 387.5] / [0.25 / 1.625] = 2.097.
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(a) a silver standard country. (b) a paper-money country. (c) a gold-standard country. (d) a bimetallic country.
In the following graph, the price of capital is $100 per unit; the price of labor is $25 per unit. When output is 30 units, what is TOTAL cost?
A. $10,000 B. $20,000 C. $2,000 D. $1,000 E. none of the above
Which of the following is LEAST likely to occur as a result of a slowdown in the growth rate of the U.S. working age population?
A. Businesses will struggle to find enough skilled workers among American workers. B. The government will find that it is harder to pay for Social Security benefits. C. Workers in the United States will feel increased pressure to pursue a college education. D. Payroll tax revenues will increase as the number of retirees falls.
The point at which the supply curve and the demand curve intersect is called:
A. irrelevant, because real-world prices never reach this point. B. equilibrium, because quantity supplied exceeds quantity demanded so there is a surplus. C. equilibrium, because quantity demanded equals quantity supplied so there is no tendency for price to change. D. equilibrium, because quantity demanded exceeds quantity supplied so there is a shortage.