A Broadway theater sells weekday show tickets at a lower price than for a weekend show. This is an example of:
A. peak-load pricing.
B. price discrimination.
C. price discrimination or peak-load pricing.
D. None of the statements is correct.
Answer: C
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Suppose Lefty has utility characterized by the equation: U l = 3I 1/2 , where I is income. In addition, Righty has utility characterized by the equation: U r = 4I 1/2 , where I is income.
(A) If each had $100,000, which one would have the higher level of utility? (B) Illustrate Lefty's and Right's utility functions. (C) What equal amount of income could we give to both that would also give them the same level of utility?
Which of the following is not necessary in order for a firm to engage in price discrimination?
a. The producer must face an inelastic demand curve. b. The producer must face a downward-sloping demand curve. c. There must be at least two identifiable classes of consumers with different price elasticities of demand. d. The producer must be able, at little cost, to distinguish between the different classes of buyers. e. It must be impossible for one buyer to resell to another.
According to the efficient market hypothesis
a. changes in the prices of stocks are predictable. Evidence shows that managed funds typically do better than indexed funds. b. changes in the prices of stocks are predictable. Evidence shows that indexed funds typically do better than managed funds. c. changes in the prices of stocks are not predictable. Evidence shows that managed funds typically do better than indexed funds. d. changes in the prices of stocks are not predictable. Evidence shows that indexed funds typically do better than managed funds.
Output for a simple production process is given by Q = KL, where K denotes capital and L denotes labor. The price of labor is $10 per unit and the price of capital is $2 per unit.If at the current level of production the marginal product of labor is 4 while the marginal product of capital is 2, then in order to minimize your costs of production you should use
A. more of both inputs. B. the same amount of both inputs. C. more capital and less labor. D. more labor and less capital.