If the price elasticity of demand for pineapples is greater than 1, an increase in pineapple prices will
A) raise total revenue.
B) lower total revenue.
C) not affect total revenue.
D) either raise or lower total revenue, but it is impossible to determine which.
Answer: B
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Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake. Which of the following statements is correct?
A. Lewis should specialize in pies, and Cathy should specialize in cakes. B. Cathy should specialize in pies, and Lewis should specialize in cakes. C. Cathy should specialize in both pies and cakes. D. There are no gains from specialization and trade.
GDP includes:
A. intermediate but not final products. B. substitute but not intermediate products. C. final but not intermediate products. D. complementary but not intermediate products.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
Last year Christine worked as a consultant. She hired an administrative assistant for $15,000 per year and rented office space (utilities included) for $3,000 per month. Her total revenue for the year was $100,000. If Christine hadn't worked as a consultant, she would have worked at a real estate firm earning $40,000 a year. For Christine to earn a normal profit as a consultant, her accounting profit would have to be ________.
A. $51,000 B. $0 C. $9,000 D. $40,000