A firm could lower prices and still increase revenue if
A) demand is elastic.
B) elasticity of demand is equal to unity.
C) demand is inelastic.
D) elasticity of demand is equal to zero.
A
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The Keynesian model differs from the classical model in that
a. people do not have perfect information about the future in the Keynesian model. b. real wages are not flexible in the Keynesian model. c. monetary policy affects aggregate demand in the Keynesian model. d. expectations are crucial in the classical model. e. all of the above.
Suppose a consumer's utility function is U(F0, F1) = F00.5F10.5, where F0 represents food consumed this year and F1 represents food consumed next year. For that utility function, the marginal utility of food consumed this year is 0.5 × (F1/F0)0.5 and the marginal utility of food consumed next year is 0.5 × (F0/F1)0.5. Suppose the consumer earns $100 this year and nothing in the next, food costs $1 per unit in both years, and the interest rate is 10%. How much does she spend this year, and how much does she save?
A. She spends $45 this year and saves $55. B. She spends $50 this year and saves $50. C. She spends $55 this year and saves $45. D. She spends $95 this year and saves $5.
A country sells more goods and services to foreign countries than it buys from them. It has
a. a trade surplus and positive net exports. b. a trade surplus and negative net exports. c. a trade deficit and positive net exports. d. a trade deficit and negative net exports.
When a monopolist sells the same product at different prices and the prices are NOT related to cost differences, we have
A. monopoly pricing. B. marginal cost pricing. C. price differentiation. D. price discrimination.