The managerial technique of markup pricing is consistent with the economic theory of profit maximization when the markup is positively related to the price elasticity of demand
Indicate whether the statement is true or false
FALSE
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
A market with well-established rules and structure is a(n) ________ market.
A. formal B. informal C. specific D. general
Which of the following has been the most likely effect of the Fed's credit policy?
A) Banks and other financial institutions have taken more time to recover from the 2008-2009 financial meltdown. B) The scope of asymmetric information problems in the banking industry has reduced. C) The money multiplier and the link between the money supply and the economy have become unstable. D) The federal funds rate and the discount rate have dropped to negative levels.
You are a baker. You paid $150K in wages, $50K for dough, $20K for power, $5K in interest for a business loan, $25K in taxes, and made a profit of $10K. How much did you contribution to GDP using the product approach?
A) $80K B) $85K C) $190K D) $260K