Johnny's Shop-and-Pay is a regional grocery chain, and their marketing manager is trying to determine the profit-maximizing coupon program for the store's laundry detergent brand
Coupon users at the store have an elasticity of demand for this product that equals -3, and the elasticity of demand for non-users of the coupon for the store brand equals -1.5. If the full retail (undiscounted) price of the detergent is $10 per box, what is the optimal discount to provide for coupon users? A) 25% off
B) 50% off
C) 75% off
D) The optimal strategy is to charge the same price to both groups
B
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In the circular flow model, profits are considered to be
A) a cost of doing business. B) equal to zero, or else the circular flow would be out of balance. C) a subtraction from the Gross Domestic Product (GDP). D) a form of interest payment.
With respect to the insurance market, what is adverse selection?
A) Adverse selection refers to the actions people take before they purchase an insurance policy. B) Adverse selection refers to the actions people take, after they purchase an insurance policy, that make the insurance company worse off. C) Adverse selection refers to people who purchase one type of insurance policy when they would have been better off purchasing a different policy. D) Adverse selection refers to the situation in which a person purchasing an insurance policy takes advantage of knowing more about his health than the insurance company knows.
The recession of 1990-1992 ________ the trend set over 1965-1990 of ________ unemployment rates at each successive cyclical trough
A) continued, lower B) continued, higher C) broke, lower D) broke, higher
Which of the following best describes the economic concept of utility?
a. Utility is the total number of units of a commodity that a consumer buys. b. Utility measures usefulness of goods, such as tools or food, and so goods such as artwork or attractive landscaping by definition has no utility. c. Utility measures the satisfaction, or pleasure, that people receive form consuming a good or service. d. Utility measures the purchasing power of individuals.