Answer the following statements true (T) or false (F)
1) If a firm purchases an input that is jointly produced with another good, changes in the demand for the other good will have no effect on the price of the input.
2) It is profit-maximizing for managers to locate their stores close together in areas that are frequented by low-income consumers.
3) Stores that are located in areas that offer a low transaction cost to consumers are more likely to be able to charge higher prices than stored located in areas with high transaction costs.
4) To maximize profit, a manager of a large chain of stores that are located throughout the United States needs to determine the average value of their consumers' time and transportation costs and locate each store in areas based on the average value.
5) A consumer's total transportation costs do not include the time the consumer spends in the store.
1) FALSE
2) FALSE
3) TRUE
4) FALSE
5) FALSE
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Which of the following items is NOT a component of the income approach to measuring U.S. GDP?
A) interest earned on savings deposits B) profits made by businesses C) income earned by businesses that export goods D) investment
Which of the following is NOT an expression for the cost minimizing combination of inputs?
A) MRTS = MPL /MPK B) MPL/w = MPK/r C) MRTS = w/r D) MPL/MPK = w/r E) none of the above
Other things the same, as the price level falls,
a. the money supply falls. b. interest rates rise. c. a dollar buys more domestic goods. d. the aggregate-demand curve shifts right.
Assume that a retailer sells 800 six packs of Dr. Pepper per day at a price of $3.00/six-pack. You, as an economic analyst, estimate that the cross-price elasticity between Dr. Pepper and Coca-Cola is 0.6. If the retailer raises the price of Coca-Cola by
10%, how would the sales of Dr. Pepper be affected, ceteris paribus? A) Sales of Dr. Pepper would rise by 48 six-packs B) Sales of Dr. Pepper would rise by 10% C) Sales of Dr. Pepper would fall by 48 six-packs D) None of the above