If a 10 percent increase in the price of a luxury hotel room causes the quantity demanded to decrease by 41.5 percent., we can conclude that the price elasticity of demand for luxury hotel rooms is approximately -0.24. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Government expenditures are considered autonomous in the model meaning that changes are the result of: A) changes in real income. B) changes in inflation. C) changes in unemployment. D) changes in policy decisions. ANSWER D
Date: September 10th, 2020
Knowledge about the price elasticity of demand is especially useful to managers because it allows them to predict how a change in price would affect a firm’s total revenues. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
A home theater system and an HD television would be considered an example of: A) substitute goods. B) giffen goods. C) inferior goods. D) complementary goods. ANSWER D
Date: September 10th, 2020
Pepsi and Coke have competed in the market for bottled water primarily on the basis of convenience and product differentiation as a means to avoid the negative effects on revenue that result from price competition. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
DSL and broadband internet service would be considered an example of: A) substitute goods. B) giffen goods. C) inferior goods. D) complementary goods. ANSWER A
Date: September 10th, 2020
“Demand” is best defined as the relationship between: A) the price of a good and the quantity consumers are willing and able to buy at each price level. B) the current price of a good and the quantity demanded at that price. C) the quantity supplied and the price people are willing to pay for […]
Date: September 10th, 2020
The extent to which investment spending changes with changes to income is called the: A) marginal propensity to consume. B) marginal propensity to save. C) marginal propensity to import. D) marginal propensity to invest. ANSWER D
Date: September 10th, 2020
Isoquants are convex to the origin due to: A) the law of diminishing marginal utility. B) the assumption of the diminishing marginal productivity of each input. C) the fact that as less capital is used, its marginal productivity falls. D) the fact that as more labor is used, its marginal productivity rises. ANSWER B
Date: September 10th, 2020
The marginal rate of technical substitution (MRTS) along an isoquant: A) is equal to the price ratio at all points along an isoquant. B) is equal to the ratio of the marginal utilities of the two goods. C) is equal to the ratio of the marginal products of the two inputs. D) remains constant as […]
Date: September 10th, 2020
