Firms tend to raise the price of their goods after acquiring a firm that sells a substitute because
a. They lose market power
b. There is an increase in the overall demand for their products
c. The bundle has a more elastic demand than individual goods
d. The bundle has a more inelastic demand than individual goods
d
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A commercial society, as described by Adam Smith, develops when
A) maximizing income becomes the ultimate objective for most people. B) more people are employed in service industries than in agriculture and manufacturing. C) private interest replaces the public interest. D) the division of labor extends itself throughout the society. E) traditional values give way to commercial values.
If a marginal cost pricing rule is imposed on the firm in the figure above, the consumer surplus will be
A) zero. B) $800. C) $400. D) $200.
If the consumption function is defined as C = 7,250 + 0.8Y, what is the autonomous level of consumption expenditure?
A) $5,800 B) $7,250 C) $9,062.50 D) $9,700
Assume that excess reserves are $35 million, demand deposits are $500 million, and total reserves are $135 million. The required reserve ratio is
A) .07. B) .2. C) .25. D) .27.