Which case below best represents a case of price discrimination?
A. A professional baseball team pays two players with identical batting averages different salaries.
B. A utility company charges less for electricity used during "off-peak" hours, when it does not have to operate its less-efficient generating plants.
C. A major airline sells tickets to senior citizens at lower prices than to other passengers.
D. An insurance company offers discounts to safe drivers.
Answer: C
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Automatic stabilizers drive changes in
a. the total deficit. b. the cyclical deficit. c. the structural deficit. d. monetary policy. e. both b and c.
You are an analyst with a perfectly competitive firm that makes DRAM memory chips. You must manufacture the chips before you know what the demand will be. If demand turns out to be high, then producing where E[MR] = MC rather than where MRH = MC lowers your profit by an amount equal to ________.
A) area A
B) area A plus the trapazoidal area marked by E and E
C) the trapezoidal area marked by E and E
D) area B + area C
The average productivity of labor reaches its maximum:
a. at the point of inflection of the total product curve. b. where the slope of the total product curve is steepest. c. where the slope of the total product curve is zero. d. where marginal and average productivity are equal.
Because resources tend to be specialized, increased production of military goods tends to
a. decrease the opportunity cost of more military goods. b. increase the opportunity cost of more non-military goods. c. increase the opportunity cost of more military goods. d. change the position of the production possibilities curve. e. alter the slope of the production possibilities curve.