Perfect price discrimination
A) turns all the producer surplus into consumer surplus.
B) turns all the consumer surplus into economic profit.
C) creates a deadweight loss.
D) cannot result in profit maximization.
B
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Define the term deadweight loss. Will there be a deadweight loss if a good's marginal cost exceeds its marginal value? Explain.
What will be an ideal response?
Use the following graphs to answer the next question.
"The bigger the volume, the lower the cost, and we pass the savings on to you" is a familiar slogan. Its idea is illustrated in which of the above graphs?
A. Graph 1 B. Graph 2 C. Graph 3 D. Graph 4
A permanent negative supply shock causes stock prices to ________ than they would if the supply shock were temporary
A) fall more B) fall less C) rise more D) rise less
Which of the following is the most likely cause of most recessions according to the Keynesian model?
a. a fall in productivity. b. an increase in taxation and government spending. c. a fall in expected profits. d. a rise in the price of oil. e. a fall in the money supply.