Which of the following best explains why airlines often cut their ticket prices at the last-minute in order to fill the remaining empty seats on their flights?
A) The Federal Aviation Administration ranks each airline based on the percentage of flights that are fully booked. These rankings affect the decisions of firms to use a particular airline to fly their employees to business meetings.
B) Fixed costs in the airline industry are very large, but the marginal cost of flying one more passenger is very low.
C) Airlines receive a subsidy from the government for each flight that is fully booked and departs on time.
D) Cutting prices makes the airlines more popular with their customers, who may fly with the same airline in the future as the result of buying low-price tickets.
B
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Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one advantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would have the ability to share risk with shareholders. B) As a sole proprietor, Torrie would face limited liability. C) As a sole proprietor, Torrie would have both ownership and control over the business. D) All of the above would be advantages of setting up her business as a sole proprietorship.
Even though the monetary policy is very quick recognize and respond to the coming of a recession than fiscal policy, it has proven in the 2000's to be less affective in avoiding or bring the economy out of the recession because
A. Increased investment by the private sector has not been forthcoming in response to the reduction in interest rates. B. Consumers have tended to increase saving and decrease consumption. C. Our economy has increased imports during recessions. D. The government has imposed fiscal policy to counteract the monetary policy.
Other things equal, the optimal number of immigrants will be greater, the:
A. greater the education and skill level of immigrants. B. lower the education and skill level of immigrants. C. higher the unemployment rate of the destination nation. D. greater the fiscal burden of each immigrant.
Which of the following is FALSE regarding inelastic demand?
A. Price elasticity of demand is less than 1 (Ep < 1). B. If a firm raises price, total revenues will go up. C. If a firm lowers price, total revenues will fall. D. Price elasticity of demand is greater than 1 (Ep > 1).