Suppose that if poor households have a price elasticity of demand for medical care of 0.50 and rich households have a price elasticity of demand for medical care of 0.25, then a price increase of 10% would lead to the poor households reducing their quantity demanded for medical care by:
A. 2.5%.
B. 5%.
C. 25%.
D. 50%.
Answer: B
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If at the current level of product-specific service, consumers' value at $12 and the cost of retailers to provide the services is $12, which of the following is true?
A) the profit-maximizing level of profit-maximizing services is exactly double the current level B) the profit-maximizing level of profit-maximizing services is greater than the current level C) the profit-maximizing level of profit-maximizing services is less than the current level D) the profit-maximizing amount of product-specific services is being offered.
The slope of an indifference curve at all points reflects
a. the terms by which the consumer can trade off goods in the market. b. the relative prices of the two goods. c. the willingness of the consumer to trade one good for another. d. consumer income relative to the price of a good. e. the relative price ratio of the two goods.
The difference between price and average total cost is
A. marginal costs. B. an irrelevant quantity. C. average profit. D. total costs.
An open economy is an economy that has
A) its own stock market. B) governmental regulations regarding the number of hours retail establishments must remain open on a daily basis. C) interactions in trade or finance with other economies. D) governmental regulations regarding public information that is included in corporate finance reports.