For a monopoly to successfully price discriminate, its customers must:
a. feel that the product is a necessity.
b. have identical demands.
c. be unable to resell the product.
d. actively engage in arbitrage.
c
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According to the permanent income hypothesis, a person's consumption increases only when
A) the person's average lifetime income increases. B) the person saves more. C) the person's current income increases. D) the person's income increases unexpectedly.
In the endogenous growth model presented in the text, an increase in the efficiency of human capital accumulation
A) increases the growth rate of human capital and increases the growth rate of output. B) increases the growth rate of human capital and decreases the growth rate of output. C) decreases the growth rate of human capital and increases the growth rate of output. D) decreases the growth rate of human capital and decreases the growth rate of output.
A country benefits from trade if it is able to obtain a good from a foreign country:
a. that has a very low domestic demand. b. the production of which requires a steady supply of unskilled labor. c. by giving up less of other goods than it would have to give up to obtain the good at home. d. by giving up more of other goods than it would have to give up to obtain the good at home. e. that has a substantial number of substitutes in the domestic market.
According to the theory of adaptive expectations, if the inflation rate has been 4.2 percent for the last ten years, people will expect next year's inflation rate to be:
a. 4.2 percent. b. higher than 4.2 percent. c. lower than 4.2 percent. d. 0; that is, they will expect no inflation. e. 8.4 percent.