Refer to the table below. If Tacos R Us sells its taco shells and taco sauce as a package, what is the profit-maximizing price for the bundle?
Tacos R Us sells two different types of products; taco shells and taco sauce. For simplicity, assume that the marginal cost of each product is $0, so that Tacos R Us' total revenue is also its total profit.
A) $7
B) $18
C) $10
D) $9
D) $9
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If price is cut and demand is elastic, then
A) total revenue will fall. B) total revenue will not change. C) quantity demanded will fall. D) total revenue will rise.
The model yt = yt -1 + et, t = 1, 2, … represents a:
A. AR(2) process. B. MA(1) process. C. random walk process. D. random walk with a drift process.
The multiplier effect occurs because
A. When national income rises, the MPC increases, prompting further increases in income. B. The new income generated by an increase in aggregate demand will be spent, each time becoming new income again. C. The level of national income must be multiplied by the average propensity to consume to find total consumption spending. D. What business firms view as spending is viewed by households as income, so that new investment automatically becomes new income.
Which of the following arguments is not offered to explain the existence of "sticky" wages?
A. the explicit contract explanation B. the relative-wage explanation C. the fact that labor contracts don't exist D. the social contract explanation