Which of the following is a correct statement?
A. The more elastic the demand, the higher the profit-maximizing markup.
B. The less elastic the demand, the higher the profit-maximizing markup.
C. The lower the marginal cost, the higher the profit-maximizing price.
D. The lower the average cost, the higher the profit-maximizing price.
Answer: B
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If fewer families choose to purchase medical insurance because of rising health insurance premiums, then:
A. the frequency of illness in the general population will fall. B. those who remain insured will tend to spend less on health care. C. those who remain insured will tend to have lower-than-average rates of illness. D. those who remain insured will tend to have higher-than-average rates of illness.
When a U.S. Senator tells a campaign crowd that "High inflation rates are a much more serious economic problem than high unemployment rates," it is an example of
A. an empirically proven fact. B. a normative statement. C. a microeconomic argument. D. a positive statement.
Suppose the pizza at Pizza House and Little Weezer's are fairly close substitutes. If Pizza House raises their price 20%, and Little Weezer's keeps their price unchanged, which is most likely to occur?
A) The demand for Little Weezer's pizza will increase B) The demand for Pizza House pizza will decrease C) Both A and B D) None of the above
Economists Eichengreen and Hausmann coined the phrase original sin to describe developing countries inability to borrow in their own currencies. Where do they believe that this inability comes from? What are other beliefs on this topic?
What will be an ideal response?