Refer to Figure 7.2. If Happy Times Theater charges one price to day customers and a different price to night customers, then the profit will be
A. $562.50.
B. $374.25.
C. $62.50.
D. $150.00.
Answer: A
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If when income increases by 2 percent and the price does not change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is ________
A) 0.33 B) 0 C) negative D) 3.00
Hyperinflations are usually caused by large budget deficits financed by
A) selling bonds to private investors. B) selling bonds to the central bank. C) raising taxes. D) borrowing from commercial banks.
We know that people tend to overuse common resources. This problem can be viewed as an example of
a. a game in which the players succeed in reaching the cooperative outcome. b. the prisoners' dilemma. c. a situation to which game theory does not apply because of a lack of strategic thinking. d. a situation to which game theory does not apply because of too many decision-makers.
Which of the following statements about excise taxes is TRUE?
A) The producer will increase the price of the good by the amount of the excise tax. B) The equilibrium price will increase and the equilibrium quantity will remain unchanged. C) Both the consumer and producer pay part of the excise tax. D) Consumers will refuse to pay excise taxes forcing the producers to pay it.