Refer to Figure 15-17. An economics professor argues: "I think the course should be priced so as to achieve economic efficiency." Which price should this faculty member favor?
A) $0
B) $40
C) $88
D) $150
B
You might also like to view...
Can electric utility companies always raise their total revenue by raising their rates?
What will be an ideal response?
Currently there is a market demand for toothpaste with baking soda in it. New medical studies show that baking soda has health benefits beyond clean teeth. After these studies are published, the market demand is such that at any price, consumers buy 10 more tubes of toothpaste than they used to. This is a parallel, rightward shift of the demand curve. Which of the following statements is true?
a. Because the curves are parallel, the elasticities don't change. b. Despite the fact that the curves are parallel, elasticity has increased. c. Even though the curves are parallel, the new one is more inelastic. d. There is no relationship between the curves and their elasticities. e. Elasticities on the new demand curve have increased at low prices and decreased at high prices.
Hostile takeovers of corporations have been in the business news for some time now. Several states have passed laws making it harder for out-of-state corporations to acquire firms headquartered in their states. Several corporations have established
"golden parachutes" to give executives high payoffs in case of hostile takeover. What market imperfection is likely to be worsened by these actions? Explain.
As a result of an increase in the money supply, the aggregate demand will shift to the left.
a. true b. false