You own a small store. Your cashier thinks you should raise prices to increase your total revenue and your customer thinks you should lower prices to increase your total revenue
The cashier thinks the price elasticity of demand is ________ and the customer believes the price elasticity of demand is ________. A) inelastic; elastic
B) elastic; inelastic
C) elastic; elastic
D) inelastic; inelastic
E) unit elastic; elastic
A
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Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is TRUE?
A) April has neither an absolute nor a comparative advantage in painting snowboards. B) April has both an absolute and comparative advantage in painting kites. C) April has both an absolute and comparative advantage in painting snowboards. D) April has neither an absolute nor comparative advantage in painting kites.
Deadweight loss occurs when
A) consumer surplus is greater than producer surplus. B) surplus losses to one group due to intervention are not offset by surplus gains to another. C) consumer surplus is reduced. D) consumer surplus is negative.
A decrease in the price of a good will cause a decrease in the firm's demand for labor
Indicate whether the statement is true or false
A free-rider problem exists when a good that has the following characteristic?
a. Rivalry in consumption. b. Elastic demand. c. Inelastic demand. d. Nonexcludable.