Use the following statements to answer this question. I. To maximize profit, a firm will advertise more when the advertising elasticity is larger. II. To maximize profit, a firm will advertise more when the price elasticity of demand is smaller
A) Both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) Both I and II are false.
A
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If the MPC in an economy is 0.75, government could shift the aggregate demand curve leftward by $60 billion by
A. reducing government purchases by $60 billion. B. reducing government purchases by $12 billion. C. increasing taxes by $15 billion. D. increasing taxes by $20 billion.
In the figure above, when the market is in equilibrium, what is the total surplus?
A) $1,000 B) $800 C) $200 D) $1,600
If the price of milk was $1.25 a gallon and it is now $2.25 a gallon, what is the percentage change in price?
A) 4.4 percent B) 8 percent C) 44 percent D) 80 percent
When the reservation wage is adjusted to account for a higher inflation rate:
a. the aggregate demand curve shifts to the right. b. the price level falls. c. the short-run Phillips curve shifts outward. d. production costs of businesses decline. e. the aggregate supply curve shifts to the right.