If labor is 80 percent of total costs in industry A and 20 percent in industry B, then other things equal, we would expect the elasticity of demand for labor to be
A) greater in industry A than in industry B.
B) greater in industry B than in industry A.
C) the same in both industries.
D) uncertain since no general relationship exists between cost shares and elasticities.
A
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If the equilibrium price level is 135 but the actual price level is 150, then
A) firms increase their production because they are able to sell their output at a higher than expected price. B) aggregate demand will decrease to restore equilibrium. C) aggregate demand will increase to restore equilibrium. D) the quantity of real GDP demanded is less than the quantity of real GDP supplied. E) the quantity of real GDP demanded is greater than the quantity of real GDP supplied.
Which of the following is not an example of a two-part pricing scheme in the context of price discrimination?
A) A customer pays full price for the first 10 copies of a software program and then receives a 10 percent discount on each additional copy it buys. B) A firm, e.g., Sam's Club or Costco, charges a membership fee that is separate from the price paid for items purchased from the firm. C) A customer pays a $10 cover charge to enter a bar and then pays $5 for each beverage. D) An amusement park charges an admission fee and then charges a per unit price for each of the rides offered by the park.