Suppose that the demand for my new book, Spatulas From Around the World, is such that the demand curve lies everywhere below the average variable cost of producing it. To maximize profits or minimize losses, I should
a. raise price
b. lower price to increase demand
c. shut down the presses printing my book
d. lower price until demand is inelastic
e. charge the highest price I can
C
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Savings is an important factor influencing economic growth because saving
A) can finance new investment and capital formation. B) helps the economy maintain the current level of total expenditures when a recession begins. C) provides a fund for wages needed from any unexpected population growth. D) All of the above answers are correct.
You are thinking about buying a house. You find one you like that costs $200,000 . You learn that your bank will give you a mortgage for $160,000 and that you would have to use all of your savings to make the down payment of $40,000
You calculate that the mortgage payments, property taxes, insurance, maintenance, and utilities would total $950 per month. Is $950 the cost of owning the house? What important factor(s) have you left out of your calculation of the cost of ownership?
The cross-price elasticity of demand between Coca-Cola and Pepsi-Cola is calculated by dividing
A) the percentage change in the price of Coca-Cola by the percentage change in the price of Pepsi-Cola. B) the percentage change in quantity demanded of Coca-Cola by the percentage change in the quantity demanded of Pepsi-Cola. C) the percentage change in the quantity demanded of Coca-Cola by the percentage change in the price of Pepsi-Cola. D) the percentage change in the price of Pepsi-Cola by the percentage change in quantity demanded of Coca-Cola.
Which of the following will contribute to higher wage rates for labor?
a. increased productivity b. increases in capital formation c. a decrease in the supply of labor d. all of the above