The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:
a. inverted block pricing
b. second-degree price discrimination
c. peak-load pricing
d. first-degree price discrimination
e. none of the above
c
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Many country inns shut down in the off-season because
a. the off-season market price falls below average total cost b. the off-season market price can't cover their average fixed cost c. the off-season revenue can't cover variable cost d. the off-season price is below the marginal cost of providing a room e. innkeepers are interested in maximizing revenue
Decision makers who try their best for rationality but are constrained by limited information and processing abilities are referred to as:
a. irrational. b. partially rational. c. boundedly rational. d. perfectly rational.
Compared to a situation where transaction costs are zero, the existence of transaction costs
a. will reduce the volume of trade. b. will reduce the gains from trade. c. may lead some buyers and sellers to employ middlemen. d. All of the above are correct.
The following include several reasons that government might give for using a tariff on imports? Which is not valid, in the sense that the effect described will not happen.
a. To raise government revenue. b. To help consumers. c. To raise incomes of producers. d. To respond to political pressures from import competing industries. e. To increase national welfare at the expense of foreigners.