Explain why baseball ticket prices may increase when a team pays a new player a large salary, but will remain unchanged when a current player gets a salary increase
What will be an ideal response?
The salary increase of a current player increases total but not marginal cost. The ticket price will remain unchanged. A new player may shift out the demand curve for tickets and result in higher ticket prices.
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Suppose the government of New Country has fixed the value of its currency, the New Peso, at $1 per New Peso, but the market equilibrium value of the New Peso is $2 per New Peso. In order to maintain the official value of the New Peso the Central Bank of New Country must either ________ domestic interest rates, or ________the supply of international reserves by purchasing New Pesos
A. lower; decrease B. lower; increase C. raise; decrease D. raise; increase
Refer to Figure 4-1. If the market price is $1.50, what is the consumer surplus on the second burrito?
A) $0.50 B) $1.00 C) $1.50 D) $3.50
“Pure monopoly guarantees economic profits.” Discuss whether this is a valid statement
What will be an ideal response?
According to modern Keynesian analysis, an increase in aggregate demand leads to a higher price level because the
A. short-run aggregate supply curve is upward sloping. B. aggregate demand curve is upward horizontal. C. aggregate demand curve is upward sloping. D. short-run aggregate supply curve is vertical.