You estimate that the income elasticity of demand for dairy products in the use is 0.20. If national income is predicted to decrease by 3%, what is the percentage change in dairy products expected (all else equal)?
a. +3%
b. -3%
c. + 0.6%
d. - 0.6%
e. Can't tell from the available information
d. - 0.6%
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The figure shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly and charges one price to all customers, then the consumer surplus is ________
A) $400 B) $900 C) $0 D) $200
Which of the following is true about the Federal Reserve and its ability to prevent recessions? The Federal Reserve
A) can fine tune the economy and realistically hope to keep the economy from experiencing recessions. B) cannot realistically fine tune the economy and has little to no effect on the magnitude and length of recessions. C) cannot realistically fine tune the economy, but seeks to keep recessions shorter and milder than they would otherwise be. D) does not try to eliminate recessions, but instead focuses on preventing inflation.
Can a country have a trade deficit forever?
What will be an ideal response?
Firms that face capacity constraints can increase output only up to the capacity, but no further. Therefore, firms
a. Should price to capacity as long as MR > MC b. Should price to capacity as long as MR = MC c. Should price to capacity as long as MR < MC d. Should not take capacity into consideration in pricing decisions