The equilibrium price is sometimes called the:
A. market-clearing price.
B. optimum price.
C. maximum price.
D. quantity-clearing price.
A. market-clearing price.
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DVDs can be produced at a constant marginal cost of $5 per disk, and Roaring Lion Studios is releasing the DVDs for its last two major films. The DVD for Rambeau 17 is priced at $20 per disk, and the DVD for Schreck 10 is priced at $30 per disk
What are the price elasticities of demand for these two movies? A) Both equal -1.2. B) -0.75 and -5/6, respectively C) -1.33 and -1.2, respectively D) -1.33 and -2, respectively
Given a nominal interest rate of 6 percent, in which of the following cases would you earn the highest after-tax real rate of interest?
a. Inflation is 3 percent; the tax rate is 25 percent. b. Inflation is 1 percent; the tax rate is 50 percent. c. Inflation is 1 percent; the tax rate is 55 percent. d. Inflation is 4 percent; the tax rate is 10 percent.
The market produces too few public goods because:
A.) The link between payment and consumption is broken. B.) They must be paid for by wealthy individuals. C.) Only the government can produce public goods. D.) The market distributes goods to those with the most money.
Suppose that the government increases taxes. One effect of this change is that it decreases
a) disposable income, which decreases consumption expenditure and aggregate demand b) government expenditure, which decreases aggregate demand c) the size of the government expenditure multiplier d) disposable income which then decreases aggregate supply