Refer to Scenario 5 . What will be the effect on total revenue for Audio Haven if it raises the price for DVD players?
What will be an ideal response?
Because the price elasticity of demand for DVD players is relatively elastic, a price increase will decrease total revenue, ceteris paribus.
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________ is maximized in a competitive market when marginal benefit equals marginal cost
A) Selling price B) Deadweight loss C) Marginal profit D) Economic surplus
Which of the following is a function performed by market prices?
a. Market prices communicate information to buyers and sellers. b. Market prices coordinate the decisions of buyers and sellers. c. Market prices motivate entrepreneurs to produce those products that are currently most desired relative to their costs of production. d. All of the above are functions performed by market prices.
A French worker can produce either 4 barrels of wine or 16 shirts a week; and Italian worker can produce either 10 barrels of wine or 20 shirts a week.
A. After the countries begin to trade, one barrel of wine will cost between four and eight shirts. B. France has an absolute advantage in both wine and shirts. C. France will export shirts and import wine. D. France has an absolute advantage in making shirts.
Which statement is true?
A. Because the United States has the largest consumer market in the world, it has been targeted by foreign sellers B. China targeted the large U.S. consumer market to help propel its strong economic growth over the last 20 years C. Today, the Chinese run such huge trade surpluses with the U.S. that they can finance most of the United States' federal budget deficit D. All the choices are true