Assume MU c and MU d represent the marginal utility that a consumer gets from products C and D, the respective prices of which are P c and P d . The consumer will increase his total utility from a specific money outlay by spending more on C and less on D
if initially:
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Relative to a monopolist charging a single price to all consumers, price discrimination ________ total economic surplus.
A. sometimes increases and sometimes decreases B. decreases C. has no effect on D. increases
When the price is $2
A. quantity supplied is greater than quantity demanded and, therefore, price must rise to get to equilibrium.
B. quantity supplied is less than quantity demanded and, therefore, price must fall to get to equilibrium.
C. quantity demanded is greater than quantity supplied and, therefore, price must rise to get to equilibrium.
D. quantity demanded is greater than quantity supplied and, therefore, price must fall to get to equilibrium.
The above figure shows the marginal private benefit and marginal social cost of a college education. If society's external benefits from college graduates is $10,000 each, then the private market outcome is inefficient because
A) no students will go to college. B) society places less value on educating the next student than it will cost society to educate that student. C) society places greater value on educating the next student than it will cost society to educate that student. D) the marginal cost will shift upward.
If assets are imperfect substitutes, then a decrease in the amount of domestic currency bonds held by the public will ________ the risk premium and ________ the amount of domestic currency bonds held by the central bank
A) decrease; leave unchanged B) increase; decrease C) increase; increase D) decrease; decrease E) leave unchanged; decrease