The balance of trade can only worsen if income ________ relative to absorption
A) increases
B) decreases
C) does not change
D) None of the above
B
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Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes charges different price in the morning and in the afternoon, then what will be its daily economic profit?
A. $32 B. $27 C. $33 D. $39
From a supply perspective, what impact would an increase in the price of motorcycles have on the market for motorcycles?
What will be an ideal response?
Suppose that the quantity of apples sold increases by 30 percent after the price of pears increases by 15 percent. What is the coefficient of cross elasticity of demand?
a. 3.0 b. 1.5 c. 0.2 d. 2.0 e. 0.3
The Ricardian equivalence theorem states that
A. increases in government spending have a larger impact on real Gross Domestic Product (GDP) than decreases in taxes. B. an increase in the government budget deficit has no effect on real Gross Domestic Product (GDP) because it only affects the price index. C. an increase in government spending has no effect on aggregate supply. D. an increase in the government budget deficit created by a current tax cut has no effect on aggregate demand.