If the percentage change in quantity demanded is greater (in absolute value) than the percentage change in price, then demand
a. determines supply
b. is indeterminate
c. is elastic
d. is inelastic
e. is unit elastic
C
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Suppose you are the monopoly owner of a movie theatre. You can allow people to enter the theatre at zero marginal cost, and you can provide popcorn at a constant marginal cost of $0.50 per bag. You have two customers, Larry and Terry, who are identical twins. Larry never buys popcorn under any circumstances. If you charge the monopoly price of $1.00 per bag for popcorn, Terry will buy 2 bags of popcorn and earn $0.50 in consumer's surplus, and you will earn $1.00 in profit from popcorn sales. If you charge the competitive price of $0.50 per bag for popcorn, Terry will buy 4 bags of popcorn and earn $2.00 in consumer's surplus, and you will earn no profit from popcorn sales.
(i) Suppose that Larry is willing to pay up to $8.00 to see the movie and Terry is willing to pay up to $5.00 to see the movie. How much should you charge for admission to the theatre and how much should you charge for popcorn? (ii) Suppose that Larry is willing to pay up to $4.00 to see the movie and Terry is willing to pay up to $5.00 to see the movie. How much should you charge for admission to the theatre and how much should you charge for popcorn?
As a factor of production, oil reserves are counted as
A) land. B) labor. C) capital. D) entrepreneurshi
The increase in the proportion of tertiary employment over time at the expense of both primary and secondary employment
(a) is peculiar to the western industrial countries. (b) is strictly an American phenomenon. (c) is present generally in all industrial countries. (d) is restricted to countries with relatively small government sectors.
The Big Mac index:
A. is measured by The Economist. B. is a simple measure that indicates differing costs of living in different countries. C. converts the price of a Big Mac worldwide to dollars, and compares it to how much they cost in the U.S. D. All of these statements are true.