You are the only seller of eggs in town, and the price-elasticity coefficient for eggs is known to be 0.8. If you want to increase your sales quantity by 10% through a price-change, what should you do to price?
A. Increase price by 12.5%
B. Reduce price by 12.5%
C. Increase price by 8%
D. Reduce price by 8%
A. Increase price by 12.5%
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In determining whether a market meets the conditions for perfect competition, it is necessary to
A. consider the number of firms in the market. B. determine the appropriate size of the firm. C. assess the production technology available to firms. D. evaluate the promotional tools that can be used by firms.
A less developed country can increase its capital stock by
a. raising taxes on purchases of capital goods b. temporarily accepting unusually high unemployment rates c. reducing government spending d. shifting resources away from production of consumer goods and toward production of capital goods e. providing more opportunities for individuals to spend their accumulated savings
In this graph, when disposable income is 4,000, consumption is
A. 4,000.
B. 3,250.
C. 2,500.
D. 1,000.
The bowed shape of the per-worker production function is caused by
A. increasing marginal productivity of capital. B. wealth effects that reduce labor supply. C. diminishing marginal productivity of capital. D. increasing marginal productivity of labor.