Economics (6th Edition)
Economics (6th Edition)
6th Edition
ISBN: 9780134105840
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 1, Problem 1.1.4PA
To determine

Marginal analysis.

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In an article about the financial problems of USA Today, Newsweek reported that the paper was losing about $20 million a year. A Wall Street analyst said that the paper should raise its price from 50 cents to 75 cents, which he estimated would bring in an additional $65 million a year. The paper’s publisher rejected the idea, saying that circulation could drop sharply after a price increase, citing The Wall Street Journal’s experience after it increased its price to 75 cents. 1- What implicit assumptions are the publisher and the analyst making about price elasticity?
In Wheelan's Naked Economics, and according the the chapter on "Economics of Information," which of the below statements correctly captures why students pay thousands of dollars to get into highly selective universities such as Harvard? Group of answer choices   Students who graduate from Harvard University are significantly brighter and better educated than those who do not.   Students engage in irrational behavior when they spend thousands of dollars on tuition and college expenses to study at highly selective universities such as Harvard.   There is little value to spending huge amounts of money to study at a highly selective university such as Harvard, because the university from which a student graduates has little (if any) impact upon the student's job or income prospects.   The choice of university signals information. Employers assume in general that the selectivity of universities ensures quality of education, and therefore graduates of Harvard and other selective universities…
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