When the manager of a local movie theater raises the price of movie tickets from $7.50 to $8.50, his total revenue falls. This means that:
a. the demand for movie tickets is highly elastic.
b. the supply of movie tickets is perfectly elastic.
c. the supply of movie tickets is unit-elastic.
d. the demand for movie tickets is inelastic.
e. the supply of movie tickets is inelastic.
a
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A firm's marginal cost is $82, its average total cost is $50, and its output is 800 units. Its total cost of producing 801 units is
A) less than $40,000. B) between $40,000 and $40,050. C) between $40,050 and $40,080. D) greater than $40,080.
Raising taxes as an element of discretionary fiscal policy is intended to reduce aggregate demand, but it can also reduce aggregate supply if
a. the higher taxes lead workers to seek out a second job. b. the higher taxes cause workers to work less. c. the government purchases goods with the additional revenue. d. the government uses the additional revenue to retire some of the federal debt. e. the higher taxes cause people to save less.
Monopolistically competitive markets are different from perfectly competitive markets because in monopolistically competitive markets, firms:
A. have some control over price, while in perfectly competitive markets firms have no control over price. B. face substantial barriers to entry, while in perfectly competitive markets firms face no significant barriers to entry. C. have no control over price, while in perfectly competitive markets firms have some control over price. D. sell a standardized product, while in perfectly competitive markets firms sell a differentiated product.
A point outside a production possibilities curve indicates
A) that resources are not being used efficiently. B) an output combination that society cannot attain given its current level of resources and technology. C) that resources are being used very efficiently. D) that both goods are characterized by increasing costs.