"Gacy's can sell clothing at lower prices than Mimbel's because Gacy's owns their own building, but Mimbel's has to pay rent." This statement is
What will be an ideal response?
misleading in its suggestion that there is no opportunity cost to Gacy' s of using the building it owns.
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Firms can practice indirect price discrimination by
a. Offering volume discounts b. Using two-part pricing c. Offering a bundle containing a number of units d. All of the above
In the long run,
a. monopolies will not incur economic losses b. the demand curve facing the firm is horizontal under monopoly c. economic profit and loss determines entry and exit into monopoly markets d. competition always destroys monopoly e. government always regulates monopoly
Suppose a country institutes an investment tax credit and that leads to an initial increase in investment spending of $100 billion. Suppose the multiplier is 1.5 and the economy's real GDP is $5,000 billion. This action is
A) expansionary and will shift the aggregate demand curve to the right by $750 billion. B) expansionary and will shift the aggregate demand curve to the right by $150 billion. C) expansionary and will shift the aggregate demand curve to the left by $7500 billion. D) expansionary and will shift the aggregate demand curve to the left by $150 billion.
Planned expenditures equal real disposable income
A. when saving equals zero. B. at every point on the saving function. C. at every point on the consumption function. D. at every point on the 45-degree line.