To engage in first-degree price discrimination, a firm must:
A. know each consumer's maximum willingness to pay.
B. be able to set P > MC.
C. prevent low-value consumers from reselling to high-value consumers.
D. All of the answers are correct.
Answer: D
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What is the difference between positive and normative statements?
What will be an ideal response?
Fact: Churches and charities work hard to acquire more money to advance their projects. They happily accept money because
A) they are clearly selfish and materialistic. B) the transaction costs of donating money are generally lower than the costs of donating other goods and services. C) they tend to see money as the root of all evil, and by collecting it they can more effectively destroy it and change the system for the better. D) none of the above.
Which of the following reduces the money multiplier?
A) Banks loan all their excess reserves. B) Bank customers hold some of the loan proceeds as currency outside the banking system. C) The Fed reduces the required reserve ratio. D) Banks impose a currency drain on bank customers. E) The Fed sells U.S. government securities.
The key feature due to which unexpected inflation decreases the unemployment rate is that:
a. expectations are formed irrationally. b. reservation wages of workers are fixed. c. workers behave irrationally. d. firms are greedy. e. government policy is time consistent.