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When firms price-discriminate, people with _____ price elasticity of demand will pay
_____ prices relative to those purchasing the same product who have a _____ price
elasticity of demand.
A) higher; higher; lower
B) lower; lower; higher
C) lower; higher; higher
D) higher; the same; lower
Figure: PPV
(Figure: PPV) Look at the figure PPV, which shows the demand and marginal revenue
for a pay-per-view football game on cable TV. Assume that the marginal cost and
average cost are a constant $20. If the cable company is a monopoly, how much is total
surplus when the monopolist maximizes profit?
A) $240
B) $160
C) $100
D) $320
A duopoly is an industry that consists of:
A) a single firm.
B) two firms.
C) three or more firms.
D) a large number of small firms.
(Table: Cost Data) Look at the table Cost Data. The average variable cost of producing
5 purses is:
A) $10.
B) $38.
C) $48.
D) $190.
The ______ of a curve shows the point at which the curve intersects an axis.
A) slope
B) steepness
C) intercept
D) origin
When there is a bountiful harvest of grapefruit, assuming that the demand curve for
grapefruit is downward-sloping, total consumer surplus in the grapefruit market:
A) will increase.
B) will decrease.
C) will remain the same.
D) may change, but we can't tell how.
The _____ is the maximum amount of good X a consumer would be willing to give up
to obtain an additional unit of good Y.
A) marginal rate of substitution
B) marginal rate of utility exchange
C) average rate of substitution
D) marginal rate of exchange
Which of the following situations demonstrates the benefits principle?
A) Employed workers pay taxes that are used to fund technical training programs.
B) Revenue from the federal tax on gasoline is used to maintain and improve the
interstate highway system.
C) Most of the revenue from property taxes is used to fund public schools. The taxes
are paid by all homeowners.
D) Taxes on cigarettes are used to pay state employees' salaries.
