Aunt Rose owned a dress shop on 81st Street and Broadway in Manhattan, selling limited-edition dresses to wealthy clients. One day, her landlord tripled her rent. What effect would this have on her dress price in the short run, assuming she is following the rules of profit maximization?
Assuming she continues to operate, the higher rent will not affect dress prices in the short run. Rent is unrelated to the production cost of dresses; that is, it is a fixed cost. Only costs that enter into direct costs influence price. Fixed costs do not alter price or output of dresses in short-run profit maximization.
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following is false? a. Market prices signal the relative availability of products to buyers
b. Market prices signal the relative value consumers place on products to sellers. c. The information and incentives offered by market price adjustments provide the "invisible hand" toward socially desirable cooperation between consumers and producers. d. None of the above are false; all are true.
Discrimination is an emotionally charged issue that is impossible to study objectively
a. True b. False Indicate whether the statement is true or false
Private property right enforceability means that you can use the reward from your effect to?
A. Sale B. Consumers C. Investment D. Help the pue E. All