When the price of a video rental was $2.00, ticket sales at the local movie theatre averaged 180 admissions per night. Then the video store reduced the price of a video rental to $1, and the theatre manager reported that ticket sales had fallen to 126 per night. What is the approximate value of the cross price elasticity of demand between video rentals and theatre tickets?
A. +1.67
B. +0.53
C. -0.53
D. +0.30
Answer: B
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Which of the following is NOT a result of a permanent fall in foreign demand on one country's exports under floating exchange rate?
A) The DD curve shifts to the left due to reduction of aggregate demand. B) The AA curve shifts upwards due to the increased expected long-run exchange rate. C) a reduction in output by a smaller degree compared to temporary fall in demand D) depreciation in home country's currency E) a raised level of unemployment
Suppose a firm has a weekly cost function of C(Q) = 8Q + (Q2/100) and a marginal cost function of MC = 8 + (Q/50). What is the efficient scale of production, and what is the minimum average cost?
A. Qe = 0; AC = $0 B. Qe = 0; AC = $8 C. Qe = 8; AC = $8 D. Qe = 8; AC = $64.64
Any change that increases the quantity of labor supplied at all wage rates will ________, assuming all else equal
A) shift the labor supply curve to the left B) cause an upward movement along the labor supply curve C) shift the labor supply curve to the right D) cause a downward movement along the labor supply curve
When markets reach the ____ price all the opportunities for mutually beneficial trade have taken place and the sum of consumer and producer surplus is ____
a. minimum, maximized b. maximum, minimized c. equilibrium, maximized d. equilibrium, shared equally between consumers and producers