Which of the following statements regarding perfect price discrimination is FALSE?
A) Only part of consumer surplus is captured by the firm as producer surplus.
B) For the firm, the market demand curve becomes the firm's marginal revenue curve.
C) The monopoly produces the output at which the marginal revenue equals the marginal cost.
D) No deadweight loss is created.
A
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Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. Suppose that
trade is then initiated between the two countries, and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat. Sylvania will now be able to consume a maximum of a. 30 units of corn and 30 units of wheat. b. 40 units of corn and 30 units of wheat. c. 40 units of corn and 20 units of wheat. d. 10 units of corn and 40 units of wheat.
If the demand for electricity is inelastic, and the local utility wants to increase its total revenue, it should ________ its price.
A. frequently change B. raise C. not change D. lower
A decrease in supply will occur when
A. the supply curve shifts upward to the left. B. the supply curve shifts downward to the right. C. the demand curve shifts downward to the left. D. the demand curve shifts upward to the right.
The production possibilities curve can shift inward when
A) production increases. B) employment increases. C) the stock of productive capital rises. D) a country experiences a natural disaster.