You are part of a local community theater group. It is the goal of the group to increase the amount of revenue earned through ticket sales. Mary says the obvious solution is to increase ticket prices. Is Mary correct?
a. Mary is correct if the demand for tickets is price inelastic.
b. Mary is incorrect if the demand for tickets is price inelastic.
c. Mary is correct. The increase in ticket prices will always increase revenue.
d. Mary is incorrect. The increase in ticket prices will never increase revenue.
e. Mary is incorrect. The way to increase revenue is to decrease ticket prices.
a
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Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1
A) not enough consumers want to buy iced tea. B) the quantity supplied is economically efficient but the quantity demanded is economically inefficient. C) economic surplus is maximized. D) the quantity supplied is less than the economically efficient quantity.
When government regulations force a natural monopoly to produce where price equals average total cost, social welfare is
a. maximized b. less than it would be without regulation c. greater than it would be without regulation, but it is not maximized d. exactly the same as it would be without regulation e. minimized
If you would have to pay $5,000 in taxes on a $25,000 taxable income and $7,000 on a $30,000 taxable income, then the marginal tax rate on the additional $5,000 of income is:
A. 40 percent and the average tax rate is about 23 percent at the $30,000 income level. B. 50 percent and the average tax rate is 40 percent at the $30,000 income level. C. 40 percent and the average tax rate is 25 percent at the $25,000 income level. D. 30 percent, but average tax rates cannot be determined from the information given.
The phases of a business cycle in order include
A) Peak, recession, trough and expansion. B) Peak, expansion, recession and trough. C) Peak, recession, expansion and trough. D) None of the above.