1. How would consumption of cars, public transportation, and in-theater movies be affected if the price of gasoline doubled? Discuss how quickly would these adjustments be made?
2. If you owned a movie theater, would you want the demand for movies to be elastic or inelastic?
3. How does this practice affect the economic cost of dispensing gasoline when the owner/operators of small gas stations rarely pay themselves an hourly wage?
4. Explain why don't more U.S. firms move to Mexico to take advantage of low wages there? Would an identical plant in Mexico be as productive as its U.S. counterpart?