If the multiplier = 2.5, the MPS would be:
A. 0.25.
B. 0.4.
C. 0.6.
D. 0.75.
Answer: B
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Refer to Figure 16-1. What is the consumer surplus received under perfect price discrimination?
A) the area under the demand curve above P1 B) the area under the demand curve above P4 C) the area under the demand curve above P3 D) zero
Suppose group price discrimination is possible; however, a firm sets the same price in each market. As a result,
A) price elasticity of demand is the same in each market. B) the price-inelastic market will buy zero units. C) marginal revenue in the more price-elastic market exceeds marginal revenue in the less price-elastic market. D) the deadweight loss is less than if the firm price discriminated.
A perfectly competitive firm is producing at the quantity where marginal cost is $6 and average total cost is $4. The price of the good is $5. To maximize its profit, this firm should
A) raise its price. B) lower its price. C) increase its output. D) decrease its output. E) increase the price it charges for its product.
In the model of monopolistic competition, an increase in industry output will ________ market shares and ________ profits of producers of higher-priced goods and will ________ market shares and ________ profits of producers of lower-priced goods
A) reduce; reduce; increase; increase B) increase; increase; reduce; reduce C) increase; reduce; increase; reduce D) reduce; increase; reduce; increase E) reduce; increase; increase; reduce