Which of the following is an imperfection of market economies?
a. They produce inexpensive services but expensive manufactured goods.
b. They place undue importance on the needs of future generations.
c. They cannot provide certain goods such as national defense.
d. They distribute income too unequally.
d
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In our study of monopoly, we found that monopolists can increase profit by segmenting the market and price discriminating (under third degree price discrimination). Now suppose a firm is producing an excludable local public good. Can you justify a form of such market segmentation and price discrimination as efficient?
What will be an ideal response?
Product-specific services are most likely to be valuable for which of the following goods?
A) a professional camera B) a calendar C) a picture frame D) photo printing paper
(Requires Appendix material) Which of the following statements is correct?
A) TSS = ESS + SSR B) ESS = SSR + TSS C) ESS > TSS D) R2 = 1 - (ESS/TSS)
When prices at Wendy's rise, more consumers buy their meals at McDonald's and fewer consumers buy their meals at Wendy's. This is an example of
A) commodity substitution. B) outlet substitution. C) consumers' action to boycott Wendy's. D) both A and B. E) both B and C.