Explain using price elasticity of demand why air conditioning manufacturers would actually have sales in the middle of the summer when customers have the most acute need? Explain this apparent paradox
What will be an ideal response?
During the winter months customers can postpone their decision to buy an air conditioner. So it would seem that manufacturers would not offer sales in the summer when customers can least afford to postpone their decision. But the reason that they do is that during the summer there is increased competition and manufacturers realize that you have choices. These choices lead to an increase in the price elasticity of demand.
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With capital on the vertical axis and labor on the horizontal axis, vertical isoquants imply that
A) capital and labor are perfect substitutes. B) capital and labor must be used together in a certain proportion. C) capital is not productive. D) labor is not productive.
If interest rates in Canada fall below those in the rest of the world, then
a. it depreciates Canada's exchange rate and this may result in a surplus on Canada's current account b. the demand for Canadian dollars increases c. exports from Canada to other countries decrease d. imports into Canada from other countries increase e. the balance of payments becomes negative
Which of the following is a correct characterization of socialism?
A. Tradition answers the basic economic questions. B. Markets are used exclusively to answer the basic economic questions. C. Central planning is seldom used to answer the basic economic questions. D. Government ownership of many resources and centralized decision-making answers the basic economic questions.
In considering the net effect of expansionary fiscal policy on the trade deficit, the:
A. income and price effects work in the same direction, so the trade deficit is decreased. B. price effect offsets the income effect. C. income and price effects work in the same direction, so the trade deficit is increased. D. income effect offsets the price effect.