Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat and $50 for pants. Consumers of type B will pay $75 for a coat and $75 for pants. The firm selling suits faces no competition and has a marginal cost of zero. If the firm can identify each consumer type and can price discriminate, what is the optimal price for a pair of pants?
A. Charge type A consumers $50, and type B consumers $75.
B. Charge both types $150.
C. Charge type A consumers $50, and type B consumers $50.
D. Charge both types $75.
Answer: A
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Profits earned by subsidiary are taxed even if it is not repatriated to the parent company as dividends because they are considered as income for the parent company.
A. True B. False C. Uncertain
Which of the following is correct?
a. The labor-force participation rate of women has increased in part due to smaller families. b. The labor-force participation rate of men has decreased in part due to men retiring younger and living longer. c. Both a and b are correct. d. Neither a nor b is correct.
most frequently used monetary policy tool is
What will be an ideal response?
According to AD-AS model, the primary long-run effect of increases in the money supply is
A) higher price level. B) higher GDP. C) lower price level. D) lower GDP.