Second-degree price discrimination is the practice of charging
A) the reservation price to each customer.
B) different prices for different quantity blocks of the same good or service.
C) different groups of customers different prices for the same products.
D) each customer the maximum price that he or she is willing to pay.
B
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Goods that are actually produced by firms are not really limited in supply, because the firms can always produce more of them.
Answer the following statement true (T) or false (F)
The Coase theorem states that
A) government intervention is always needed if externalities are present. B) assigning property rights is the only thing the government should do in a market economy. C) under certain conditions, the property right to an activity will be acquired by the party that values it most. D) a free-market equilibrium is the best solution to address externalities.
Government support of basic research by funding scientists through the National Science Foundation is an example of a government policy to promote economic growth by:
A. increasing physical capital. B. increasing the availability of natural resources. C. improving technology. D. increasing human capital.
A constant-cost, perfectly competitive market is in long-run equilibrium. At present, there are 1,000 firms each producing 400 units of output. The price of the good is $60. Now suppose there is a sudden increase in demand for the industry's product
which causes the price of the good to rise to $64. In the new long-run equilibrium, how will the average total cost of producing the good compare to what it was before the price of the good rose? A) The average total cost will be higher than it was before the price increase since the increase in demand will drive up input prices. B) The average total cost will be lower than it was before the price increase because of economies of scale. C) The average total cost will be higher than it was before the price increase because of diseconomies of scale arising from the increased demand. D) The average total cost will be the lower than it was before the price increase as output increases.