You are the manager of a gas station and your goal is to maximize profits. Based on your past experience, the elasticity of demand by Ohioans for a car wash is ?3, while the elasticity of demand by non-Ohioans for a car wash is ?1.5. If you charge Ohioans $9 for a car wash, how much should you charge a man with a Kentucky license plate for a car wash?
A. $9
B. $15
C. $18
D. $6
Answer: C
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Gresham's Law states that:
a. Good money tends to drive bad money out of circulation. b. Virtual and electronic money tends to drive physical money out of circulation. c. Bad money tends to drive good money circulation. c. In times of financial instability, nations should "gresham," which means to back their currencies by precious metals. d. In times of financial instability, commodity-backed money tends to drive electronic and virtual currencies from circulation.
A local restaurant offers an "all you can eat" Sunday brunch for $12. Jenica eats two servings but leaves half of a third helping uneaten. Why?
a. Her marginal value of brunch has fallen below $12. b. Her marginal value of additional food has fallen below $4 ($12 divided by 3 servings). c. Her marginal value of an additional bite of food has fallen to zero. d. The total value she places on brunch today exactly equals $12.
Based on the graph showing a contractionary policy response to a negative supply shock, a decrease in aggregate demand leads to ______.
a. increased inflation and decreased unemployment
b. increased output and prices, and decreased unemployment
c. decreased output and prices, and increased unemployment
d. increased output and increased prices
Total market supply can be derived by
A. adding up the largest quantity demanded at various prices. B. horizontally summing individual supply curves at each and every price level. C. vertically summing individual supply curves at the current technology level. D. looking at the changes in the price of raw materials needed to produce the product.