If advertising makes demand of a product less elastic, it makes sense for a firm to
a. Decrease the price of the product
b. Increase the price of the product
c. Leave the price unchanged
d. None of the above
b
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Suppose job search has decreased over the last several years. This decrease could be a result of
i. a change in unemployment benefits. ii. a positive structural change. iii. a higher inflation rate. A) i only B) ii only C) i and iii D) i and ii E) ii and iii
What is the Coase theorem?
What will be an ideal response?
Suppose the real money demand function is
Md/P = 2400 + 0.2Y - 10,000 (r + ?e). Assume M = 5000, ?e = .03, and Y = 5000. If the price level were to decrease from 2.5 to 2.0, then the real interest rate would decrease by how many percentage points (assuming Md, ?e, and Y are unchanged)? A) 4 B) 5 C) 9 D) 14
In the above figure, the total dollar amount of the Medicare subsidies provided by the government is equal to
A) the difference between Ps and P0 multiplied by QM. B) the difference between Ps and Pd multiplied by QM. C) the difference between P0 and Pd multiplied by Qd. D) the difference between Ps and Pd multiplied by Q0.