If a firm wishes to engage in price discrimination, which of the following conditions must be met?
a. The demand curve must be horizontal.
b. It must be possible to prevent resale of the good from low-paying to high-paying customers.
c. The supply curve must be horizontal.
d. Many identical firms in the market must each have a small share of total industry output.
e. Price must be less than marginal cost.
B
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We allocate resources efficiently when
A) marginal benefit is equal to marginal cost. B) marginal benefit is greater than marginal cost by any amount. C) marginal cost is greater than marginal benefit. D) total benefit is greater than total cost. E) marginal benefit is greater than marginal cost by as much as possible.
Endogenous growth theory tries to explain why
A) the growth rate of technological change varies across countries. B) capital is not subject to diminishing marginal returns. C) total factor productivity is the only determinant of labor productivity. D) balanced growth occurs in all economies.
Consumer surplus
a. is the amount of a good that a consumer can buy at a price below equilibrium price. b. is the amount a consumer is willing to pay minus the amount the consumer actually pays. c. is the number of consumers who are excluded from a market because of scarcity. d. measures how much a seller values a good.
When income increases, the money demand curve shifts to the ________, which ________ the interest rate with a fixed money supply.
A) right; increases B) right; decreases C) left; increases D) left; decreases