Arbitrage is the act of buying low in one market and selling high in another market
a. True
b. False
Indicate whether the statement is true or false
True
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For products like parking lots and hotels, costs of building capacity are mostly fixed or sunk and firms in this industry typically face capacity constraints. Therefore,
a. If SRMR>SRMC at capacity, then the firms should price to fill capacity
b. If SRMR
If the price elasticity of demand is 1.5, regardless of which two points on the demand curve are used to compute the elasticity, then demand is
a. perfectly inelastic, and the demand curve is vertical. b. elastic, and the demand curve is a straight, downward-sloping line. c. perfectly elastic, and the demand curve is horizontal. d. elastic, and the demand curve is something other than a straight, downward-sloping line.
Discretionary fiscal policy refers to:
A. any change in government spending or taxes that destabilizes the economy. B. the authority that the president has to change personal income tax rates. C. intentional changes in taxes and government expenditures made by Congress to stabilize the economy. D. the changes in taxes and transfers that occur as GDP changes.
If a business decreased the price of its product from $10 to $9 when demand was price inelastic, then total revenues would:
A. be perfectly inelastic. B. remain unchanged. C. decrease. D. increase.