Most movie theatres charge different prices to different groups of customers for movie admission but not on movie popcorn. Which of the following is a reason for this?
A) because the markup on movie popcorn is very high and movie theatres do not want to forgo this source of revenue
B) because it is easier to limit resale in movie admissions but not in popcorn
C) because the cost of operating a concession stand in a movie theatre is very high compared to the cost of showing a movie
D) because the demand for popcorn is very high relative to the demand for movie admissions
B
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The income elasticity of demand for jewelry is 2. Other things equal, a 10% increase in consumer income will ________ the quantity of jewelry demanded by ________
A. decrease; 5%. B. increase; 5%. C. increase; 20%. D. decrease; 20%.
How does the federal government avoid the asymmetric information problem associated with providing health care to people over 65 years of age?
A) Health care is standardized and is the same for all people over 65 years of age. B) Health insurers rely on the reputation of the covered individuals. C) Participation in the Medicare program is mandatory for all people over 65 years of age. D) Health information about people enrolled in the Medicare program is publically available.
A game with a first-mover advantage is one in which:
A. the player who chooses first gets a higher payoff than those who follow. B. the player who chooses first gets to decide if a repeated game will start with cooperation from the beginning. C. the first player to move determines the payoffs for the rest of the game. D. None of these statements is true.
If Debbye is willing to pay $50 for a pair of shoes but only has to pay $20 because the shoes are on sale, then her consumer surplus on that pair of shoes is
a. $50 b. $20 c. $70 d. $30 e. $25