The last time the U.S. Post Office raised its prices for mail service critics of the rate increase argued that the Post Office's revenues would actually decline as a result of the price increase. It can be concluded that:
A) both groups believe demand is elastic, but for different reasons.
B) both groups believe demand is inelastic, but for different reasons.
C) the Post Office believes demand for mail service is elastic; opponents of the price increase believe demand is inelastic.
D) the Post Office believes demand for mail service is inelastic; opponents of the price increase believe demand is elastic.
D
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Economists would say tariffs
A. protect domestic producers of exported goods. B. limit voluntary exchanges. C. protect foreign producers of goods. D. protect domestic consumers of goods.
The colonies as a whole had a significant commodity import deficit in their trade with England. The least important source of foreign exchange earnings to offset this trade deficit was:
a. insurance charges and merchant commissions. b. the sale of ships. c. the sale of colonial shipping services. d. payment for slaves.
The larger the MPC: a. the smaller the multiplier
b. the smaller the effect of a given increase in government purchases on consumption purchases. c. the larger the effect of business taxes which reduce investment on aggregate demand. d. the less powerful changes in individual taxes will be in changing aggregate demand.
Over the last two decades the combination of the internet, high definition TV, and the surround sound has revolutionized watching a movie at home. At the same time, advances in technology in the movie theater have raised the standard that the home entertainment alternative must achieve. Think about the effects of these technological changes on movie watching and identify another market for related goods or service where one will expand and the other will contract. Describe in detail the sequence of events as the two related items you've identified respond to the new technologies.
What will be an ideal response?