A car dealership estimates that the elasticity of demand for its top models is 0.5. If it raises its prices by 10%,
A. quantity demanded will decrease by 5% and total revenue will increase.
B. there will be no change in either quantity demanded or total revenue because demand is inelastic.
C. quantity demanded will decrease by 5% and total revenue will decrease.
D. quantity demanded will decrease by 10% and total revenue will increase.
A. quantity demanded will decrease by 5% and total revenue will increase.
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The value of unpaid childcare services provided by a stay-at-home dad ________ included in GDP; the value of daycare services purchased from a licensed childcare provider ________ included in GDP.
A. is; is B. is not; is C. is; is not D. is not; is not
Economists estimated that the cross-price elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03. This means that
A) beer and wine are substitutes and wine is a luxury good. B) beer and wine are substitutes and wine is an inferior good. C) beer and wine are complements and wine is a luxury good. D) beer and wine are complements and wine is an inferior good.
Which of the following creates a positive social rate of return?
a. Providing a free secondary education to the public b. Paying higher wages to workers with college degrees c. Offering government grants to private universities d. Earning an advanced degree at a public university
The AB Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?