Compared to monopoly pricing, an optimal two-part tariff
A) equates marginal revenue and average revenue. B) reduces economic efficiency.
C) eliminates the deadweight loss. D) increases consumer surplus.
C
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The above figure shows the U.S. market for flip-flops. When there is no international trade, the U.S. price is ________ per flip-flop and the U.S. quantity is ________ flip-flops
A) $14; 300,000 B) $14; 500,000 C) $14; 700,000 D) $12; 700,000 E) $12; 300,000
Suppose that choice sets are convex but we tastes may or may not be convex. (Assume all our other usual assumptions about tastes hold.) The first order conditions of the constrained utility maximization problem are then
A. necessary conditions for a true optimum. B. sufficient conditions for a true optimum. C. necessary and sufficient conditions for a true optimum. D. none of the above.
Which of the following explains why a bank holds reserves?
I. Banks are required by law to hold reserves. II. To meet depositors' currency withdrawals III. To use them to make loans to households A) I only B) II only C) I and II D) I, II, and III E) I and III
In a perfectly competitive market, in the long run a permanent decrease in the market demand results in a smaller number of firms
Indicate whether the statement is true or false