Suppose you manage a baseball stadium. To pay the salary for a star player, you would like to increase the total revenue from ticket sales. Should you increase or decrease the price of a ticket to increase revenue? Explain
If demand is inelastic, then raise the price to increase total revenue. If demand is elastic, then lower the price to increase total revenue.
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If society leaves some of its resources unemployed, then it will be operating at a point:
a. beneath its production possibilities curve. b. at a corner of its production possibilities curve. c. anywhere along its production possibilities curve. d. outside of its production possibilities curve.
The law of diminishing marginal utility says that
a. as more of a good is consumed, total utility diminishes causing marginal utility to diminish as well b. as more of a good is consumed, total utility increases causing marginal utility to diminish c. with reference to consumption, more is better than less until a point is reached after which less is better than more d. with reference to consumption, less is better than more until a point is reached after which more is better than less e. we always value the "one before the last one" more
Suppose that the nominal exchange rate is 80 yen per dollar, that the price of a basket of goods in the U.S. is $500 and the price of a basket of goods in Japan is 50,000 yen. Suppose that these values change to 100 yen per dollar, $600, and 70,000 yen. Then the real exchange rate would
a. appreciate which by itself would make U.S. net exports fall. b. appreciate which by itself would make U.S. net exports rise. c. depreciate which by itself would make U.S. net exports fall. d. depreciate which by itself would make U.S. net exports rise.
The figure below depicts the short-run market equilibrium in a perfectly competitive market and the cost curves for a representative firm in that market. Assume that all firms in this market have identical cost curves.
A starting assumption about this industry was that all of the firms in the market had identical cost curves. This assumption is:
A. unrealistic because firms closely guard the details of their production processes. B. realistic because firms rarely seek out cost-saving innovations. C. unrealistic because each firm is unique. D. realistic because any cost-saving innovation adopted by one firm will be quickly adopted by others.