EXPLORING ECONOMICS
8th Edition
ISBN: 2818000015614
Author: Sexton
Publisher: SAGE
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Chapter 10, Problem 9P
To determine
The
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Part 1
The figure to the right gives an economy's initial aggregate demand (AD) curve.
Using the line drawing tool, show a decrease in aggregate demand. Properly label this line.
Part 2
Note: Carefully follow the instructions above and only draw the required object.
Part 3
Which of the following will generate a decrease in aggregate demand?
A.
Increased government expenditures for infrastructure.
B.
A tax increase.
C.
An increase in the price level.
D.
An increase in the money supply.
A movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal costs are zero and neither movie can fill theater capacity. What is the theater's maximum profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)?
a. $2,000; $2,600
b. $1,500; $2,100
c. $1,500; $2,000
A movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal costs are zero and neither movie can fill theater capacity. What is the theater's maximum profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)?
a. $2,000; $2,600
b. $1,500; $2,100
c. $1,500; $2,000
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