Are outstanding credit card balances counted as part of the money supply? a. yes; they are used to purchase things, and therefore, they are included in the money supply figures. b. partly; credit card balances are included in the m1 money supply, but not the m2 money supply. c. no; money is an asset, while the credit card balances are a liability. thus, they are not included in the money supply figures. d. partly; credit card balances of $100 or less are included in the m1 money supply, but the money supply figures do not include balances in excess of $100.

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?