Consumers are usually sensitive to price.
a. true
b. false
Ans: a. true
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ABC news in Australia reported that the average annual wage in 2008 was $13,308. To calculate the real wage rate in Australia, you would need to know
A) Australia's inflation rate between 2007 and 2008. B) Australia's price level in 2008. C) the core inflation rate in Australia in 2008. D) the exchange rate between the U.S. dollar and the Australian dollar.
The "greater fool" theory assumes that
A) markets are efficient. B) bubbles cannot exist in well-organized markets. C) it makes sense for an investor to buy an asset as long as there is someone else to buy it later for a higher price. D) bond market returns are always above stock market returns.
Which of the following is an example of peak-load pricing?
A) Charging less for vacations to Hawaii during December and January B) Charging more for electricity on hot days C) Setting price equal to marginal cost when there is a capacity constraint D) Selling excess capacity at lower prices
The loss of the profit motive by a publicly-owned natural monopoly causes which of the following to happen?
A. Increased pressure from the public to turn a profit B. Increased pressure from the public to cut costs C. Decreased incentive to improve efficiency D. Increased motivation to cut costs