Recall the Application about choosing a price for drones based on a linear demand curve to answer the following question(s).Recall the Application. Suppose a firm that produces drones has a linear demand curve for its product, with a vertical intercept of $1,500. If the firm does NOT want the demand for its product to be price-inelastic, the minimum price it should charge is:
A. $500.
B. $750.
C. $1,000.
D. $1,500.
Answer: B
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A change in the price level brings a ________ the aggregate supply curve, NOT a ________ the aggregate supply curve
A) vertical displacement of; change in the slope of B) change in the slope of; horizontal displacement of C) shift in; change in the slope of D) movement along; shift in E) shift in; movement along
In the market for books, initially there are no taxes on books. Books are normal goods. The government introduces a tax of $4 a book and, at the same time, people's income fall by $4,000 a year
Following these two changes, the equilibrium quantity of books A) decreases. B) increases. C) remains unchanged. D) either increases or decreases. We cannot say which.
If the probability a firm is being embezzled is 5 percent and the estimated potential cost to the firm from embezzlement is $250,000, what is the expected cost of an audit failure?
A) $12,500 B) $25,000 C) -$15,000 D) $15,250
The United States economy is generally operating _________ the production possibilities curve.
A. inside B. outside C. on