A company producing sports equipment wishes to increase its total revenue. Should it increase or decrease its price when the product's price elasticity of demand is equal to -0.3?
(a) Increase - the good is price inelastic and in order to increase TR the firm should increase its price.
(b) Decrease - the good is price elastic and in order to increase TR the firm should decrease its price.
(c) Increase - the good is price elastic and in order to increase TR the firm should increase its price.
(d) Decrease - the good is price inelastic and in order to increase TR the firm should decrease its
price.
Answer: (a) Increase - the good is price inelastic and in order to increase TR the firm should increase its price.
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If the equilibrium price level is 135 but the actual price level is 120, then
A) firms decrease their production because they cannot sell the output they produce. B) the quantity of real GDP demanded is less than the quantity of real GDP supplied. C) the quantity of real GDP demanded is greater than the quantity of real GDP supplied. D) aggregate demand will increase to restore equilibrium. E) aggregate demand will decrease to restore equilibrium.
Basically the United States' high rate of population growth since the time of George Washington's presidency
A. has been a drag on the United States' rate of economic growth. B. pushed up the United States' rate of unemployment. C. created a growing problem of not enough food to feed everyone. D. provided a market for the United States' farmers and manufacturers.
If a country currently produces a mix of output that lies inside its production possibilities curve, then macro stabilization policies try to
A. Shift the aggregate demand curve to the right. B. Shift the short-run aggregate supply curve to the left. C. Shift the aggregate demand curve to the left. D. Move the economy to the right down the existing aggregate demand curve.
Adding more resources causes:
A. downward movement along a production possibilities curve. B. the production possibilities curve to shift in. C. upward movement along a production possibilities curve. D. the production possibilities curve to shift out.