You are the manager of a theater. At present the theater charges the same admission price of $8 to all customers, regardless of age. You propose a two-tier pricing scheme: $5 for children under the age of 12 and $10 for adults
You tell your supervisor that your proposal is likely to increase revenue. What must be true about the price elasticity of demand if your proposal is to achieve its goal of raising revenue? Explain your answer.
You believe that the price elasticity of demand for theater tickets for children is elastic. Hence, a decrease in price will increase revenue. The demand for tickets for adults is inelastic; therefore, increasing price for this group will increase revenue.
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Three arguments used to promote trade barriers are the national security argument, the infant-industry argument, and the dumping argument. Explain each of these arguments and evaluate whether each one has any flaws
What will be an ideal response?
Changes in relative prices occur when
A) all prices move together. B) all exchange rates move together. C) product prices change at different rates. D) exchange rate appreciation is greater than price appreciation.
A tax is proportional if, as a person's income rises, the
a. tax rate remains unchanged b. tax rate falls c. tax rate rises d. amount of the tax remains unchanged e. amount of the tax falls
As the interest rate falls,
a. the quantity of money demanded falls, which would reduce a shortage. b. the quantity of money demanded falls, which would reduce a surplus. c. the quantity of money demanded rises, which would reduce a shortage. d. the quantity of money demanded rises, which would reduce a surplus.