iTunes charges British customers 20 percent more than customers in France and Germany. Apple defended the price difference, saying that the "underlying economic model in each country has an impact on how we price our track downloads." An economist would say that Apple is engaged in:
A. monopolistic competition.
B. price discrimination.
C. collusion.
D. reverse engineering.
Answer: B
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Why do firms pay dividends? It would appear that they are subject to double taxation, giving more incentive to eliminate them.
What will be an ideal response?
After 2003, The Federal Reserve usually keeps the discount rate
A) above the target federal funds rate. B) equal to the target federal funds rate. C) below the target federal funds rate. D) equal to zero.
Suppose you're producing designer clothes for Barbie dolls. You're producing 100 units and discover that the MR for the 100th unit is $50 while the MC of the 100th unit is $45 . If you're in the short run, it's a signal for you to
a. shut down b. stay where you are because you're making profit on that unit c. increase production beyond 100 units d. produce less than 100 units e. it's no signal because price data is unknown
An efficient tax is one that raises the desired tax revenue but creates the least possible
A. total burden. B. excess burden. C. tax incidence. D. tax shifting.