Product differentiation can lead to gains in economic welfare.
Answer the following statement true (T) or false (F)
True
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Recall the Application. Recessions can occur either when there is a(n) ________ in aggregate demand or a(n) ________ in aggregate supply
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
Refer to Figure 9.2. A movement from point b to point c could be caused by a simultaneous ________ and ________
A) decrease in taxes; decrease in the price of oil B) increase in the money supply; increase in the price of oil C) increase in taxes; decrease in government spending D) increase in the price of oil; massive crop failure
The price of furnace filters increased by 5 percent and the quantity demanded did not change. The price elasticity of demand for furnace filters is
A) perfectly inelastic. B) inelastic. C) elastic. D) unit elastic. E) perfectly elastic.
Price discrimination, where different units of a good are sold for different prices
A) is impossible because there can only be one market price. B) can be effectively practiced by all monopolists. C) maximizes consumer welfare because each consumer pays only the price he or she is willing to pay. D) is possible if the good cannot be resold.