Demand for movie rentals is highly elastic. A video store that raises the price of a rental will:
a) lose revenue
b) gain revenue
c) possibly gain or lose revenue
d) see no change in revenue
Ans: c) possibly gain or lose revenue
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Economics is
a. a discipline in the physical sciences b. a field that deals exclusively with normative issues c. a field that deals exclusively with positive issues d. only useful for examining behavior in capitalist economies e. a discipline that focuses on how choices are made in society
According to the sophisticated, or modern quantity theory of money, if there is a depression and M rises,
A. P will rise. B. P will fall. C. Q will rise. D. Q will fall.
A monopoly has two production plants with cost functions C1 = 40 + 0.2Q12 and C2 = 50 + 0.1Q22. The demand it faces is Q = 480 ? 5P. What is the profit-maximizing price?
A. $40 per unit B. $50 per unit C. $45 per unit D. $60 per unit
The inefficiency of taxation means that imposing a tax on a good or service typically
A. increases costs across the board. B. reduces the amount produced. C. increases the amount produced. D. causes backlogs and surpluses.