Auto dealers slash prices at the end of the model year in response to deficient demand/excess inventory but restaurants facing the same problem slash production because
a. auto customers are less price sensitive than restaurant customers
b. price elasticity of demand (in absolute values) is higher for auto than restaurant customers
c. price elasticity of supply is lower in auto than in restaurants
d. restaurant food spoils quickly and is much more perishable
e. price elasticity of supply in autos is smaller than the absolute value of price elasticity of demand but the reverse is true for restaurants
e
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When marginal cost is positive, total cost is ________ as output increases
A) increasing B) decreasing C) constant D) negative E) undefined
If both autonomous imports and autonomous taxes decrease by $100B we expect that equilibrium income will
A) increase by more than $200B. B) decrease by more than $200B. C) increase by $200B. D) remain unchanged.
A one-year discount bond with a face value of $1000 has an interest rate of 4%. What is its price?
A) $960 B) $961.54 C) $996 D) $1,040
According to the classical model, if the government wanted to increase employment, it could do so by increasing its own spending. That would lead firms to produce more output, for which they would need to hire more workers
a. True b. False