Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, it should charge prices of:
A. P 1 to children and P 2 to adults.
B. P 1 to adults and P 2 to children.
C. P 1 to both children and adults.
D. P 2 to both children and adults.
A. P 1 to children and P 2 to adults.
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The Fed is considering eliminating
A) primary credit lending. B) secondary credit lending. C) seasonal credit lending. D) its lender of last resort function.
A decrease in the supply of chocolate chips would usually result in a
a. higher equilibrium price and a lower equilibrium quantity b. lower equilibrium price and a lower equilibrium quantity c. lower equilibrium price and a higher equilibrium quantity d. higher equilibrium price and a higher equilibrium quantity e. decrease in the demand for chocolate chips
Sticky prices in oligopoly markets are
A. represented by the kinked demand curve model. B. typical of cartels. C. most common for highly differentiated products. D. a result of price discrimination.
Answer the following statements true (T) or false (F)
1. A linear relationship only refers to one whose graph is either vertical or horizontal. 2. In graphing a relationship between two variables, economists always follow the mathematical convention. Thus, if price is the independent variable then it is measured on the horizontal axis. 3. An assumption is usually made in a two-axes (or two-dimensional) graph that, aside from the two variables under study, the influence of all other variables or factors is assumed to be constant. 4. The slope of a graph measures the rate of change in one variable as the other variable changes.