Question

Please select as true, false or uncertain for the following and explain your answer

1.The economics point of view is not valid for making decisions related to social undertakings, such as soup kitchens, or aid to poor families.

2. Indifference curves never cross. If they were to cross, that would mean that preferences are inconsistent.

3. If two products are perfect substitutes - that is, if people are different between them - then the elasticity of demand will be exactly equal to -1.

4.. In an indifference curve analysis, it is impossible for the quantity demanded of one of the two goods to be equal to zero.

5 Assume that in a business school, a particular academic center brings in $800,000 in revenues per year. Total variable costs, comprised of salaries, benefits, and space rental for conferences, add up to $650,000 per year. Overhead allocated to this particular center is equal to $300,000. The Dean has decided to close down this center, because "it loses money; it loses $150,000." What do you think about this decision?

6. If the price elasticity of demand is higher in one market than in the other, the

optimal pricing strategy is to charge a higher price in the market with the higher

elasticity of demand than in the market with the lower elasticity.

7. Economic theory suggests that there will always be illegal immigration into

countries that have much higher salaries than neighboring countries.

8 Dynamic pricing is an economist dream come true.

9. Dynamic pricing is very unfair, since poor people will not be able to afford the

good or service in question during peak demand periods.

10. Income elasticities of demand can never be equal to zero

Answer 1