You interview with an athletic footwear manufacturer that has annual advertising expenditures of $32 million and total sales revenue of $100 million, and the firm selects the profit maximizing level of advertising expenditures
If the advertising elasticity of demand is 0.4, then you know that "Rule of Thumb for Advertising" implies that the demand for the firm's products is: A) inelastic.
B) unit elastic.
C) elastic.
D) zero.
C
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If any of the assumptions of perfect competition are violated,
A) supply-and-demand analysis cannot be used to study the industry. B) graphs with flat demand curves cannot be used to study the firm. C) graphs with downward-sloping demand curves cannot be used to study the firm. D) there may still be enough competition in the industry to make the model of perfect competition usable. E) one must use the monopoly model instead.
Structures in the economy increase aggregate demand when the economy is in recession and decrease aggregate demand when the economy is inflationary are known as:
a. tax transfers. b. inventory investment. c. accelerators. d. depreciation. e. automatic stabilizers.
The degree of government involvement in the economy is greatest in a. a command economy. b. a mixed economy
c. a market economy. d. a traditional economy.
If the United States has a trade deficit with China, then China must have
A. a trade surplus with the United States. B. a trade deficit with the United States. C. a trade deficit with countries other than the United States. D. a trade surplus with countries other than the United States.