Explain how firms use elasticity and revenue to make decisions
What will be an ideal response?
A company's total revenue is defined as the amount of money the company receives by selling its goods. This is determined by two factors: the price of the goods and the quantity sold.The law of demand tells us that an increase in price will decrease the quantity demanded.
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If the current unemployment rate is 5%, under which of the following circumstances would you expect the Fed to use contractionary monetary policy?
A) if the inflation rate is above 5% B) if the inflation rate is below 5% C) if the natural rate of unemployment is below 5% D) if the natural rate of unemployment is above 5%
Distinguish between a change in demand and a change in quantity demanded
What will be an ideal response?
The determinants of labor supply include:
A. culture and other opportunities. B. supply of other factors and output prices. C. culture and technology. D. other opportunities and technology.
An industry in which one firm can achieve economies of scale over the entire range of market supply is a
A. Natural monopoly. B. Perfectly competitive market. C. Kinked demand curve oligopoly. D. Contestable market.