If you expect the economy is going to boom and average income in the economy will rise in the foreseeable future, the type of firm that would be able to increase its sales if your expectations are met is
A) one that sells a luxury good. B) one that sells a necessity good.
C) one that sells an inferior good. D) one that sells a price-inelastic good.
A
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The government of your state wants Gigantic Software Corp, which is a natural monopoly, to stay in business yet still produce where price equals marginal cost. The government might choose to
a. set a price ceiling 10 percent lower than its previous level b. impose a tax on the company for each dollar of sales c. establish regulations that raise the company's cost of doing business d. provide a subsidy to the company to cover the loss and ensure a normal profit e. replace the company's top management
As of 2010, the World Bank classified a country as a low-income economy when its domestic per capita GDP fell below _____
a. $1000 b. $995 c. $675 d. $530 e. $475
If the price of natural gas rises, when is the price elasticity of demand likely to be the highest?
a. immediately after the price increase b. one month after the price increase c. three months after the price increase d. one year after the price increase
The ratio of the total shift in aggregate demand to the initial shift in aggregate demand is known as the multiplier
Indicate whether the statement is true or false