Suppose that you're the manager of a firm. You notice that when you raised your price from $10 to $11, sales fell from 500 to 400. Should you raise your price more?
What will be an ideal response?
No. In fact, you should lower your price. At this price, the elasticity of demand is 2, so you're operating on the elastic portion of your demand curve. Here, it makes sense to lower the price to increase revenues.
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The funds used to purchase capital goods are called
A) investment. B) savings. C) financial capital. D) dividends and interest.
Most Americans
a. have accurate perceptions of the level of corporate profits. b. underestimate corporate profits. c. overestimate corporate profits. d. believe that corporations earn zero profit.
Imposing a restrictive quota on the import of dishwashers will likely
a. increase the price of the dishwashers but decrease the quantity consumed. b. increase both the price of the dishwashers and the quantity consumed. c. leave the price of the dishwashers unchanged but decrease the quantity consumed. d. leave the price of the dishwashers unchanged and also leave the quantity consumed unchanged.
If Congress passes legislation to increase government spending to counter the effects of a recession, then this would be an example of a(n):
A. Supply-side fiscal policy B. Expansionary fiscal policy C. Contractionary fiscal policy D. Nondiscretionary fiscal policy